Sand Hollow Reservoir CITY OF ST. GEORGE, UT

Sand Hollow Reservoir

CITY OF ST. GEORGE, UT

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED JUNE 30, 2003

Prepared by Philip R. Peterson, CPA

Finance Director

1

CITY OF ST. GEORGE, UTComprehensive Annual Financial ReportFor the Fiscal Year Ended June 30, 2003

TABLE OF CONTENTS

INTRODUCTORY SECTION PageLetter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5GFOA Certificate of Achievement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

City Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FINANCIAL SECTIONIndependent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Basic Financial Statements:

Government-wide Financial Statements:Statement of Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Fund Financial Statements:Balance Sheet - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 34Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund . . . . . . . . . . . . . . . . . . . . 36Statement of Net Assets - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . 38Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Statement of Cash Flows - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . 40Statement of Fiduciary Net Assets - Fiduciary Funds . . . . . . . . . . . . . . . . 41Statement of Changes in Fiduciary Net Assets - Fiduciary Funds . . . . . . 42

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Supplemental Information

Combining Balance Sheet - Nonmajor Governmental Funds . . . . . . . . . . . . . . 71Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . 73Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual:

Dixie Center Operations - Special Revenue Fund - . . . . . . . . . . . . . . . . . 75Airport PFC Fees - Special Revenue Fund - . . . . . . . . . . . . . . . . . . . . . . . 76

2

Economic Development - Special Revenue Fund - . . . . . . . . . . . . . . . . . 77Transportation Improvement - Special Revenue Fund - . . . . . . . . . . . . . . 78SunTran Public Transit - Special Revenue Fund . . . . . . . . . . . . . . . . . . . 79Recreation G.O. Bonds - Debt Service Fund . . . . . . . . . . . . . . . . . . . . . . 80Special Assessments - Debt Service Fund - . . . . . . . . . . . . . . . . . . . . . . . 81Capital Equipment - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . 82Downtown Redevelopment - Capital Projects Fund - . . . . . . . . . . . . . . . 83Park Impact - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Streets Impact - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . . . 85Special Assessments - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . 86Drainage Impact - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . 87Fire Impact - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88Police Impact - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . . . 89Street Bonds - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . . . . 90Recreation Bonds - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . 91Public Works - Capital Projects Fund - . . . . . . . . . . . . . . . . . . . . . . . . . . 92Replacement Airport - Capital Projects Fund . . . . . . . . . . . . . . . . . . . . . . 93

Combining Balance Sheet - Nonmajor Proprietary Funds . . . . . . . . . . . . . . . . . 94Combining Statement of Revenues, Expenses, and Changes in Fund Balances - Nonmajor Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Combining Statement of Cash Flows - Nonmajor Proprietary Funds . . . . . . . . 96Capital Assets Used in the Operation of Governmental Funds:

Schedule by Source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Schedule by Function and Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Schedule of Changes by Function and Activity . . . . . . . . . . . . . . . . . . . . 99

STATISTICAL SECTION:Electric Fund - Statistical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Water Fund - Statistical Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102General Governmental Expenditures and Other Uses by Function

General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103Revenues and Other Financing Sources by Source - General Fund . . . . . . . . . 103Tax Revenue by Source - General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Property Tax Levies and Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Taxable and Market Value of Taxable Property . . . . . . . . . . . . . . . . . . . . . . . 105Special Assessment Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105Property Tax Rate - All Direct and Overlapping Governments . . . . . . . . . . . . 106Ratio of General Bonded Debt to Taxable Value and Bonded Debt

Per Capita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Computation of Legal Debt Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107Computation of Direct and Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . 107Ratio of Annual Debt Service Expenditures for General Bonded Debt to

Total General Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

3

Revenue Bond Coverage - Water & Wastewater Utilities . . . . . . . . . . . . . . . . 108Demographic Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Principal Taxable Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Miscellaneous Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

SINGLE AUDIT SECTION:Independent Auditor’s Report on Compliance With Laws and Regulations andon Internal Control over Financial Reporting Based on an Audit of BasicFinancial Statements Performed in Accordance with Governmental AuditingStandards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115Notes to the Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . 116Schedule of Findings & Questioned Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117Independent Auditor’s Report on Compliance with Requirements Applicable toEach Major Program and Internal Control Over Compliance in Accordance withOMB Circular A-133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119Independent Auditor’s Report on State Legal Compliance . . . . . . . . . . . . . . . . . . . . . 121Schedule of Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123Response to Findings and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125Summary Schedule of Prior Audit Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

CONTINUING DISCLOSURE SECTION:Excise Tax Revenue Bonds - Series 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127General Obligation Parks & Rec Bonds - Series 1996 . . . . . . . . . . . . . . . . . . . . . . . . 129Sewer Revenue Bonds - Series 1997A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132Water Utility Revenue Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140Washington County/St. George Interlocal Agency - Series 1997A . . . . . . . . . . . . . . . 143Municipal Building Authority Lease Revenue Refunding - 1998A . . . . . . . . . . . . . . 144

4

THIS PAGE LEFT BLANK INTENTIONALLY

5

October 31, 2003

To the Honorable Mayor, Members of the City Council, City Manager, and Citizens of the City of St. George

It is with great pleasure that the Comprehensive Annual Financial Report (CAFR) for theCity of St. George for the year ended June 30, 2003, is presented.

In addition to the fund financial information presented in the City’s financial statements,this report now includes government-wide financial statements. The government-wide financialstatements include a Statement of Net Assets that provides the total net assets of the Cityincluding all capital assets (including infrastructure) and the Statement of Activities that showsthe cost of providing government services. The City has taken a leadership role in implementingthese new accounting standards.

State law requires that all local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generallyaccepted accounting principles (GAAP) and audited in accordance with generally acceptedauditing standards by a firm of licensed certified public accountants. This ComprehensiveAnnual Financial Report is hereby issued and submitted to you for the fiscal year ended June 30,2003, in accordance with these requirements.

This report consists of management’s representations concerning the finances of the Cityof St. George. Consequently, management assumes full responsibility for the completeness andreliability of all of the information presented in this report. To provide a reasonable basis formaking these representations, management has established an internal control framework that isdesigned to both protect the assets of the City from loss, theft, or misuse and to allow for thecompiling of sufficient reliable information for the preparation of the City’s financial statementsin conformity with GAAP. Because the cost of internal controls should not outweigh theirbenefits, the City’s internal control procedures have been designed to provide reasonable ratherthan absolute assurance that the financial statements will be free from material misstatement. Tothe best of management’s knowledge and belief, this financial report is complete and reliable inall material respects.

The City of St. George’s financial statements have been audited by Kemp, Burdick,Hinton, & Hall, LC, a firm of licensed certified public accountants. The goal of the independentaudit was to provide reasonable assurance that the financial statements of the City of St. George

6

for the fiscal year ended June 30, 2003, are free of material misstatement. The independent auditinvolved examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements; assessing the accounting principles used and significant estimates made bymanagement; and evaluating the overall financial statement presentation. The independentauditor concluded, based upon the audit, that there was a reasonable basis for rendering anunqualified opinion that the City of St. George’s financial statements for the fiscal year endedJune 30, 2003, are fairly presented in conformity with GAAP. The independent auditor’s reportis presented as the first component of the financial section of this report.

Generally accepted accounting principles require that management provide a narrativeintroduction, overview, and analysis to accompany the basic financial statements in the form ofManagement’s Discussion and Analysis (MD&A). This letter of transmittal is designed tocomplement MD&A and should be read in conjunction with it.

The comprehensive annual financial report is presented in five sections:

1. The Introductory Section, which is unaudited, includes this letter of transmittal andthe City’s organization chart.

2. The Financial Section, which includes the MD&A, the basic financial statements, andthe independent auditor’s report on the financial statements.

3. The Statistical Section, which is unaudited, includes selected financial anddemographic information, generally presented on a multi-year basis.

4. The Single Audit Section, which includes all reports and schedules necessary in orderfor the City to comply with the Single Audit Act and U.S. Office of Management andBudget Circular A-128, Audits of State and Local Governments.

5. The Continuing Disclosure Section, which includes various schedules necessary tomeet the continuing disclosure requirements of various bond issues which the City hasundertaken.

The financial reporting entity (the City) includes all funds of the primary government(i.e., the City of St. George as legally defined), as well as all of its component units. Componentunits are legally separate entities for which the primary government is financially accountable. The Downtown Redevelopment Agency component unit is reported in the statements as a capitalprojects fund while the Municipal Building Authority is reported as an enterprise fund.

State statutes detail the functions to be performed by State municipalities. Title 10 of theUtah Code generally sets out laws to provide for the incorporation, organization, andclassification of cities and towns in proportion to population. Cities of the third class, such as theCity, are those with fewer than 60,000 and more than 800 inhabitants. State law allows cities of

7

the third class to choose government either by mayor and city council or by mayor, city council,and city manager. The City of St. George is organized under general law and governed by amayor and five city council members elected at large for staggered four-year terms. The Mayorpresides over all meetings but casts no vote in the City Council except in the case of a tie. TheCity Manager is responsible for the day-to-day operations of the City as it’s chief operatingofficer. Department heads are full-time employees of the City and are responsible for day-to-dayoperations within the policy framework of the governing body. They report to the Mayor, CityManager, and the City Council.

The principal powers and duties of municipalities are to maintain law and order, abatenuisances, guard public health and sanitation, promote recreation, provide fire protection, andconstruct and maintain streets, sidewalks, waterworks and sewers. Municipalities also regulatecommercial and residential development within their boundaries by means of zoning ordinances,building codes and licensing procedures.

ECONOMIC CONDITION AND OUTLOOK

The City of St. George, incorporated in 1862, is the county seat of Washington County,which county is located in the extreme southwest corner of the state of Utah. It is nestled in apicturesque valley surrounded by impressive sandstone cliffs. The backdrop is breathtaking withblue skies, clean air, and a friendly business environment which attracts over 2 millioninternational visitors annually. The desert climate promotes year round recreation and leisureactivities, which includes eight championship golf courses. Washington County is one of thefastest growing areas in Utah and is expected to remain so well into the 21st century. The 2000census showed a population of 49,663 which was an increase of 74.24% from the 1990 census.

St. George, the county’s largest city, lies along Interstate 15 with a host of smallercommunities that make up Utah’s Dixie. The advantages of the county’s position along one ofthe nation’s key east-west routes between California and established destination points such asSalt Lake City, Denver, and Albuquerque is making Washington County one of the nation’sfastest growing communities. The scenic area not only provides easy access to major markets ofthe western United States, it has become a destination point for countless people and businesseslooking for a better way of life and more fruitful atmosphere for growth and prosperity. By theend of the decade, the St. George-Zion National Park areas of Washington County were ratedamong the best communities in the country to retire by Rand-McNally, Prentice Hall, Money,and the American Association of Retired People. (Washington County, a spectacularenvironment for business growth)

During the fiscal year there were building permits issued for over 1,380 residential units. It represents an increase of over 33% from the prior year’s number of units. When the issuanceof the permit last year for the new hospital is eliminated the increase in evaluation is up 46%over last year. When the hospital is included, the value of construction is up over 5%. The newhospital campus will greatly expand the types of medical services available in the City (i.e.,

8

open-heart surgery, neurosurgery, etc.) and expand the hospital’s role as a regional provider ofmedical services to much of Southwest Utah.

Some of the major accomplishments and projects which were begun during the fiscal yearare as follows:

The City continues work on the financial planning, land acquisition, and other issuesrelated to the construction of a new regional airport within the City. A setback wasencountered with a court ruling which ruled that the City must conduct an environmentalstudy concerning the impact of the airport on the natural quiet of Zion National Park. During the year the City authorized and began the work of accomplishing such a study. Itis anticipated that the project may be delayed somewhat, but it is hoped that it will not bea substantial delay.

Wells’ Dairy Inc. completed construction on a 158,000-square foot, $40 million ice creamprocessing manufacturing facility that began processing and making ice cream shortlyafter the year end. The plant is located within the Ft. Pierce Industrial Park and isexpected to eventually create up to 70 jobs.

A number of highway and street projects were completed and others began during thefiscal year. Included in these were the reconstruction of Highland Drive, the constructionof the new bridge on Dixie Drive south, the completion of the Black Ridge SID, and theLittle Valley SID. The Community Development Department also completed the updateto the City master plan during the year.

The Mayor & City Council agreed to assume the community transit system which hasbeen operating within the City for the last few years but to reduce the service andconsolidate it into a more efficient and economical system. In the past the system hasbeen run by the Five County Association of Governments with an annual operatingsubsidy provided by the City. The City began operating the system in January, 2003 as aseparate special revenue fund within the City.

Work was begun, along with the Washington County Water Conservancy District, onconstruction of a major water pipeline which will bring water from the Quail CreekReservoir and the existing water treatment plant to the west side of the City. Thetreatment plant will then be expanded and increase the amount of culinary water availablewithin the City.

An existing building was purchased in the Millcreek Industrial Park as a replacement forthe Parks division maintenance building. Construction began on Fire Station #7 in theDixie Downs area which will also serve as a secondary dispatch center for the policedepartment. Funding was requested from the county, state, and federal governments toassist in the preservation of the dinosaur tracks found at the Johnson farm. Subsequent to

9

year-end a build/design contract was approved for construction of a building to housethese unique items on site.

Proactive steps were taken with a reorganization of the water & energy departments andwith a much more active approach to our purchasing for power for resale, the ElectricUtility enterprise fund was able to reverse the trend of the of the last couple of years andsignificantly reduce the amount of losses during the current fiscal year.

CASH MANAGEMENT

The Utah Money Management Act (MM Act) governs the investment of all public fundsheld by public treasurers in the state. It establishes criteria for the investment of public fundswith an emphasis on safety, liquidity, yield, matching strategy to fund objectives, and matchingthe term of investments to the availability of funds. The MM Act provides a limited list ofapproved investments, including qualified in-state and permitted out-of-state financialinstitutions, approved government agency securities, and investments in corporate securitiescarrying “top credit ratings.”

The law requires all securities to be delivered versus payment to the Treasurer’ssafekeeping bank. It also requires diversification of investments. The City is currentlycomplying will all of the provisions of the MM Act for all City operating funds. A significantportion of the City’s funds are invested in the Utah Public Treasurer’s Investment Fund (PTIF).

All deposits are held either by the City, its agent or a financial institution’s trustdepartment in the City’s name. All of the City’s investments held during the year, and at year-end, are classified in the category of lowest credit risk as defined by the Government AccountingStandards Board.

RISK MANAGEMENT

The City has organized a Safety/Risk Management Committee consisting of safetyrepresentatives from each of the City’s departments. The responsibilities of the committeeinclude:

(1) Establish City-wide safety rules, policies, and training programs.

(2) Review, investigate, and act upon safety matters referred by the City Manager,Department Heads, and employees generally.

(3) Perform safety inspections and make periodic reviews for adherence to safetyrequirements.

(4) Educate and train employees to understand and follow safety rules and procedures.

10

As part of an over-all risk management effort, the City has also established a ClaimsCommittee to review controversial or large dollar claims. This committee consists of theDirector of Administrative Services, Risk Manager, City Manager, City Attorney, HumanResource Manager, and the department head whose area of speciality is most closely related tothe claim.

The City has also established an “Incident Report Form” to facilitate the timely reportingof employee, third party, or property related incidents that could result in financial expenditures.

PENSION BENEFITS PROVIDED

During the fiscal year ended June 30, 2003, the City participated in two separateretirement systems. One system is maintained by the Utah State Retirement Board which coversCity, County, and State employees in the State of Utah. Those contributions above the Staterequired rates are invested in a separate defined contribution plan administered by theInternational City Managers Association retirement trust.

AWARDS & ACKNOWLEDGEMENTS

The Government Finance Officers Association (GFOA) awarded a Certificate ofAchievement for Excellence in Financial Reporting to the City of St. George for itscomprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2003. In orderto be awarded a Certificate of Achievement, the City published an easily readable and efficientlyorganized CAFR. This report satisfied both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. I believe that ourcurrent CAFR continues to meet the Certificate of Achievement Program’s requirements and Iam submitting it to the GFOA to determine its eligibility for another certificate.

The preparation of this financial report would not have been possible without theefficient and dedicated services of the entire staff of the Finance Department and ourindependent auditors, Kemp, Burdick, Hinton, and Hall. My thanks also to the City Manager,Administrative Services Director, Mayor and members of the City Council for their support anddedication to maintaining the highest standards of professionalism in the management of theCity’s finances.

Respectfully submitted,

Philip R. Peterson, CPAFinance Director

17

MANAGEMENT’S DISCUSSION AND ANALYSIS

As management of the City of St. George, we offer readers of the City of St. George’s financialstatements this narrative overview and analysis of the financial activities of the City of St.George for the fiscal year ended June 30, 2003. We encourage readers to consider theinformation presented here in conjunction with additional information that we have furnished inour letter of transmittal.

FINANCIAL HIGHLIGHTS

• The total net assets of the City of St. George increased 9.38% to $199,433,204.

• The total net assets of $199,433,204 is made up of $144,487,569 in capital assets net ofrelated debt and $54,945,635 in other net assets.

• In the General Fund, revenues exceeded expenditures by $3,230,885. $2,482,195 wasthen transferred to other funds including the Capital Equipment Capital Projects Fund tobe used to fund additional capital projects. The total fund balance of the General Fundrepresents 13.7% of total budgeted expenditures for the next fiscal year ending fy2004.

• Total long-term liabilities of the City was reduced $1,619,831

• Business-type activities total net assets increased $8,857,918 or 9.26%.

REPORTING THE CITY AS A WHOLE

This discussion and analysis is intended to serve as an introduction to the City of St. George’sbasic financial statements. The City of St. George’s basic financial statements comprise threecomponents: 1) government-wide financial statements, 2) fund financial statements, and 3) notesto the financial statements. This report also includes other supplementary information in additionto the basic financial statements.

The government-wide financial statements are designed to provide readers with a broadoverview of the City of St. George’s finances, in a manner similar to a private-sector business.

• The statement of net assets presents information on all of the City of St. George’sassets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator ofwhether the financial position of the City of St. George is improving ordeteriorating. However, you will also need to consider other nonfinancial factors.

• The statement of activities presents information showing how the City’s net assetschanged during the fiscal year reported. All changes in net assets are reported assoon as the underlying event giving rise to the change occurs, regardless of the

18

timing of related cash flows. Thus all of the current year’s revenues and expensesare taken into account regardless of when cash is received or paid.

Both of the government-wide financial statements distinguish functions of the City of St. Georgethat are principally supported by taxes and intergovernmental revenues (governmental activities)from other functions that are intended to recover all or a significant portion of their costs throughuser fees and charges (business-type activities).

The government-wide financial statements can be found on pages 31 & 32 of this report.

REPORTING THE CITY’S MOST SIGNIFICANT FUNDS

A fund is a grouping of related accounts that is used to maintain control over resources that havebeen segregated for specific activities or objectives. The City of St. George also uses fundaccounting to ensure and demonstrate compliance with finance-related legal requirements. All ofthe funds of the City can be divided into three categories: governmental funds, proprietary funds,and fiduciary funds.

• Governmental funds - These funds are used to account for the same functions reported asgovernmental activities in the government-wide financial statements. These fundstatements focus on how money flows into and out of these funds and the balances left atyear-end that are available for spending. These funds are reported using an accountingmethod called modified accrual accounting, which measures cash and other financialassets that can be readily converted to cash. The governmental fund statements provide adetailed short-term view of the City’s general government operations and the basicservices it provides. Governmental fund information helps users determine whether thereare more or fewer financial resources that can be spent in the near future to finance theCity’s programs. We describe the relationship (or differences) between governmentalactivities (reported in the Statement of Net Assets and the Statement of Activities) andgovernmental funds in a reconciliation included with the fund financial statements.

The only major governmental fund (as determined by generally accepted accountingprinciples) is the General Fund. The balance of the governmental funds are determined tobe nonmajor and are included in the combining statements within this report.

• Proprietary funds - The City of St. George maintains two different types of proprietaryfunds. Enterprise funds are used to report the same functions presented as business-typeactivities in the government-wide financial statements. The City of St. George usesenterprise funds to account for its Electric Utility, Water Utility, Wastewater CollectionUtility, Wastewater Treatment Utility, Municipal Building Authority, Refuse Collection, and Golf Courses. Internal service funds are an accounting device used to accumulateand allocate costs internally among the City of St. George’s various functions. The Cityuses an internal service fund for providing self-insurance above that amount carried with

19

commercial insurance companies. Because this service primarily benefits governmentalactivities, they have been included with governmental activities in the government-widefinancial statements.

As determined by generally accepted accounting principles, all enterprise funds except forRefuse Collection and Golf Courses meet the criteria of major fund classification. TheRefuse Collection and Golf Courses funds are classified as nonmajor and are included inthe combining statements within this report.

• Fiduciary funds - These funds are used to account for resources held for the benefit ofparties outside the government. Fiduciary funds are not reflected in the government-widefinancial statements because the resources of those funds are not available to support theCity’s own programs. The accounting method used for these funds is much like that usedfor proprietary funds.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of a government’s financialposition. In the case of the City of St. George, assets exceed liabilities by $199,433,204.

By far the largest portion of the City of St. George’s net assets (72.44%) reflects its investment incapital assets (e.g., land, buildings, infrastructure assets, and machinery and equipment), less anyrelated debt used to acquire those assets that is still outstanding. The City uses these capitalassets to provide services to citizens; consequently, these assets are not available for futurespending. Although the City’s investment in its capital assets is reported net of related debt, itshould be noted that the resources needed to repay this debt must be provided from other sources,since the capital assets themselves cannot be used to liquidate these liabilities.

STATEMENT OF NET ASSETS (in thousands)Governmental Business-type Activities Activities 2003 2002 2003 2002

Current and other assets $44,441 $ 36,153 $29,308 $ 24,748Capital assets 91,220 84,552 150,283 144,004

Total assets 135,661 120,705 179,591 168,752

Long-term debt outstanding 33,866 30,519 63,149 67,077Other liabilities 6,833 3,467 11,971 6,062

Total liabilities 40,699 33,986 75,120 73,139

20

Net assets: Invested in capital assets,

net of debt 57,354 54,034 87,134 76,985 Restricted 35,096 30,420 6,737 6,163 Unrestricted 2,512 2,265 10,600 12,465

Total net assets $94,962 $86,719 $104,471 $ 95,613

CHANGES IN NET ASSETS (in thousands)Governmental Business-type Activities Activities

2003 2002 2003 2002 Revenues: Program revenues: Charges for services $ 7,027 $ 6,267 $ 68,934 $ 62,424 Operating grants & contributions 6,526 5,145 19 13 Capital grants & contributions 2,073 2,536 - 69General revenues: Property taxes 7,181 6,678 Other taxes 15,467 15,380 Investment income 1,020 1,142 378 794 Other revenues 922 17 233 1,302

Total revenues 40,216 37,165 69,564 64,602Expenses: General government 5,129 4,462 Public safety 8,395 7,445 Highways/public improvements 8,076 7,927 Parks & recreation 6,453 5,791 Community & econ development 1,171 990 Interest on long-term debt 2,053 2,145 Electric 36,461 41,519 Water 7,792 6,672 Wastewater collection 6,098 5,825 Wastewater treatment 4,257 4,222 Golf courses 4,077 4,104 Municipal building authority 488 519 Refuse collection 2,229 2,125 Total expenses 31,277 28,760 61,402 64,986

Increase in net assets before transfers 8,939 8,405 8,162 ( 384)Transfers (696) (363) 696 363

Increase in net assets 8,242 8,042 8,858 ( 21)Net assets beginning 86,719 78,677 95,613 95,634Net assets ending $ 94,962 $ 86,719 $104,471 $ 95,613

21

The following graphs display the government-wide activities for governmental activitiesreflected in the above tables.

22

Primarily because of the sale of a parcel of city property, the amount of interest and otherrevenues increased from 3.11% of revenues to 4.83%. Charges for services remained essentiallythe same as last year, while capital grants decreased from 7.28% to 5.16% and other taxesdecreased from 41.26% to 38.5%. This is mainly the result of the elimination of the temporarycost recovery charge during the prior year which was eliminated during the 2003 fiscal year. Operating grants increased from 13.58% to 16.24% primarily because of the grants for airportsecurity which funded the placement of police officers at the airport. Overall governmentalrevenues were up 8.1%.

Although all expenditure categories in the governmental activities saw increases except forinterest on long-term debt, all remained fairly constant as a percentage of total expenditures. Highways/public improvements declined from 27.6% to 25.8% for the only item changing bymore than 1%. As an individual category general government increased 14.95%; public safetyincreased 12.76%; highways/public improvements increased 1.88%; parks & recreation increased11.43%; and community development increased 18.28%. Overall governmental expenditures forall funds increased by 8.75%.

Total net assets in business-type activities increased by $8,857,918. A large portion of this isbecause of the electric utility improving from a loss of over $8.6 million in 2002 to a loss of only$30,000 during 2003. The following graphs again reflect the government-wide activities forbusiness-type activities as displayed in the above tables.

23

As can be seen from the following chart, the majority of revenues in the business-type activitiesis in charges for services with over 99% of the revenues as compared to 96.63% in fy 2002 andwith interest earnings of less than 1% as compared to 3% in 2002. The City has never had apolicy of obtaining grants (either capital or operating) for the operations of business-typeactivities.

FINANCIAL ANALYSIS OF GOVERNMENT’S FUNDS

The focus of the City’s governmental funds is to provide information on near-term inflows,outflows, and balances of spendable resources. Such information is useful in assessing the City’sfinancing requirements.

As of the June 30, 2003, the City’s governmental funds (General, Capital Projects, Debt Service,& Special Revenue) reported combined fund balances of $38,394,857. This represents anincrease of $4,967,327 (14.86%) over last year’s ending balances.

The General Fund is the chief operating fund of the City. All activities which are not required tobe accounted for in separate funds either by state or local ordinance or by a desire to maintain a

24

matching of revenues and expenses, are accounted for in this fund. While revenues exceededexpenditures in the General Fund by over $3.2 million during the year, a large portion of thesurplus was transferred almost in total to the Capital Equipment Capital Projects Fund for use infuture capital projects. Thus the General Fund total fund balance increased by just $748,691. Ananalysis of this total fund balance shows that it represents just over 13.7% of projected revenuesfor the new fiscal year which ends June 30, 2004. State laws allows for a maximum fund balanceof 18% so the City is well within those limits.

Taxes continue to be the largest source of revenue in the General Fund and represent 64.05% oftotal general fund revenues. The largest element of taxes is sales taxes as it has been for the lastseveral years. It represents 50.43% of total tax revenues and represents 32.37 of total generalfund revenues. This compares with 35.78% in the prior fiscal year ended June 30, 2002.

The following charts display General Fund revenues as a percent of total revenues for the pasttwo years.

25

The following graphs display the expenditures in the General Fund by function for the past twofiscal years. As can be seen by reviewing these graphs, most expenditures are close tomaintaining the same percentage of expenditures over the two years. The only exception ispublic safety which increased from 26.9% to 30.01%.

26

As stated earlier, the City maintains several enterprise funds to account for the business-typeactivities of the City. The separate fund statements included in this report provides the same information for business-type activities as is provided in the government-wide financialstatements. However, the difference is that the fund statements provide much more detail.

The Electric Utility fund was able to make a major turnaround in it’s operations during the yearby a combination of the rate increase passed in February of 2002 and a more concerted effort tomanage the cost of power purchased for sale to our citizens/customers. Total operating revenuesin the utility increased by 11.68% during the year and the cost of power purchased declined by12.48%. The net result was that the utility went from a loss of $8.675 million in 2002 to a loss ofjust under $31,000 for 2003. The Water Utility fund had a reduction of 18.52% in it’s netincome with 64.42% of that reduction ($565,492) being the result of an economic loss on therefunding of prior bonds. In the long-term the bonds will serve to reduce the overall interestexpense on the debt and also reduce the cash flow necessary for debt service. The WastewaterTreatment fund saw an increase of 14.21% in it’s net income as revenues increased over 9.6%from the prior year.

GENERAL FUND BUDGETARY HIGHLIGHTS

During the fiscal year, the General Fund original budget was amended from an original budgetexpenditure total of $27,030,000 to a final budget of $29,776,637 (10.16%). These increaseswere made to take advantage of revenues being better than originally anticipated. The largestincrease was to allow for the transfer of surplus revenues from the General Fund to the CapitalEquipment Capital Projects fund.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital assets - The City of St. George’s investment in capital assets for its governmental andbusiness-type activities as of June 30, 2003, amounts to $241,503,227 (net of accumulateddepreciation). This investment in capital assets includes land, buildings and systems,improvements, infrastructure (streets, sidewalks, etc.), and machinery and equipment. The total increase in the City’s investment in fixed assets for the current year was 5.8% (a 7.9 % increasefor governmental activities and a 4.4 % increase for business-type activities).

Major capital asset events during the current fiscal year included the following:

• $697,984 for purchase of property in the Little Valley area of the city to be used for parksand recreation purposes.

• $246,677 for the purchase of property for the police department pistol range.

27

• $946,192 for the purchase and renovation of an existing building in the MillcreekIndustrial park for use as the parks division maintenance facility.

• $315,351 for the purchase of property near the replacement airport site.

• $355,840 for the purchase of a new fire engine to be used in fire station #7 when it iscompleted.

• $142,485 for completion of the Bloomington roundabout.

• $803,173 for the beginning of the Highland Drive reconstruction project. This projectwill be completed during the 2004 fiscal year.

• $465,918 for various park improvements in the city included over $400,000 for thecompletion of the The Springs Park.

• $125,792 for construction of the SunTran office building and improvements to the fleetservices building to accommodate the city acquiring the transit operation.

• $2,079,996 for the construction of the Dixie Drive bridge and extension of Dixie Drive.

• $279,068 for construction of the roundabout and Main & Tabernacle streets in the centerof town.

• $329,991 for the airport feasability study for the replacement airport and $36,468 to beginthe environmental impact study necessary.

• $649,987 in the Water Utility for construction of wells, pipeline, and power lines in theGunlock wells field area. $946,867 was spent to begin the process of expansion of theQuail Creek water treatment plant. $613,905 was spent on the planning and constructionof the water reuse line, and $5,523,576 was spent to acquire the right of ways, waterrights, etc. necessary for the completion of the water line extension by the Washington CoWater Conservancy District to provide Quail Creek water to the west side of the City.

• $1,241,269 was spent in the Electric Utility for expansion and improvements to thedistribution system and another $560,800 was spent for improvements and constructionof substations throughout the City.

28

CITY OF ST. GEORGE’S CAPITAL ASSETS(net of depreciation)

Governmental Business-type Activities Activities 2003 2002 2003 2002

Land $ 15,573,315 $ 12,508,261Buildings 14,000,914 13,598,792Improvements 29,251,671 28,972,884Infrastructure 27,080,590 24,514,164Machinery & equipment 5,313,823 5,271,617Plant, prop.& equipment $150,282,914 $144,003,553

Total $ 91,220,313 $ 84,552,362 $150,282,914 $144,003,553

Additional information on the City’s capital assets can be found in the footnotes to this financialreport and also the supplemental section.

Long-term debt - At June 30, 2003, the City had total bonded debt outstanding of $95,606,000. Of this amount $28,290,000 is considered to be general obligation debt and backed by the fullfaith and credit of the City; $5,613,000 is special assessment debt for which the City is liable inthe event of default by the property owners subject to the assessment; and the remainder of$61,703,000 is debt which is secured solely by specific revenue sources (i.e., revenue bonds).

CITY OF ST. GEORGE’S OUTSTANDING DEBTGovernmental Business-type Activities Activities 2003 2002 2003 2002

General obligation bonds $17,425,000 $ 17,520,000Downtown RDA bonds 442,000 623,000Excise Revenue bonds 1,810,000 2,210,000Pace & Randall note - 25,000WCIA Capital lease bonds 8,613,000 7,046,940Special assessment debt with governmental commitment 5,613,000 3,027,000Revenue bonds $61,703,000 $66,553,000Total outstanding debt $33,903,000 $30,451,940 $61,703,000 $66,553,000

The City’s total debt decreased by $1,398,940 during the fiscal year.

• The City issued $3,176,000 in special assessment bonds.

29

• The City issued $1,726,000 is WCIA lease revenue bonds.

• The City issued $12,325,000 in water revenue refunding bonds.

• The City issued $3,385,000 in sewer revenue refunding bonds.

The City’s bonds continue to have the same ratings which they have carried for the past severalyears. These ratings are as follows:

Moody’sInvestors StandardsService & Poors Fitch

1997 Recreation GO bonds Aaa AAA AAA1993 Water Revenue Aaa AAAWastewater Revenue Aaa AAA

State statutes limit the amount of general obligation debt a governmental entity may issue to 4%of its total taxable value. The current limitation for the City is $112,246,531, which issignificantly in excess of the City’s outstanding general obligation debt. In addition, state statuteallows for an additional 4% to be used for water, sewer, or electrical projects thus resulting in adebt limit of 8% of total taxable value. The current limitation for these water, sewer andelectrical projects is thus $224,493,061, which again significantly exceeds the outstandingbusiness-type activity debt.

Additional information on the outstanding debt obligations of the City can be found in thefootnotes to this report.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES

• The unemployment rate for Washington County (of which St. George is the largest City)was 4.1 % compared with a state unemployment rate of 5.1% and a national rate of 6.1%. This compares with a rate of 3.7% in 2002. (Source: Utah Dept of Workforce Services)

• The General Fund budget for the fiscal year-ending June 30, 2004 reflects an increase of4.85% over the final budget for the fiscal year-ended June 30, 2003. The largest part ofthis increase in for additional capital improvements at the existing airport as well as thepurchase of a fire and rescue vehicle at the airport per new FAA regulations.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of the City of St. George’s

30

finances for all those with an interest in the City’s finances. Questions concerning anyinformation provided in this report or requests for additional financial information should beaddressed to:City of St. George, Finance Director, 175 E 200 N, St. George, UT 84770.

CITY OF ST. GEORGE, UTAH STATEMENT OF NET ASSETS

JUNE 30, 2003

Governmental Business-typeActivities Activities Total

ASSETS:Cash 28,498,567$ 14,185,184$ 42,683,750$ Restricted cash 6,737,724 6,737,724 Accounts receivable (net of allowance 9,121,036 5,519,040 14,640,076 for doubtful accounts)Inventory 48,483 1,721,519 1,770,001 Notes receivable 949,668 35,210 984,877 Interfund receivables 5,287,414 Bond discounts 1,106,628 1,106,628 Prepaid expenses 535,649 2,830 538,479 Capital assets (net of depreciation)

Land 15,573,315 15,573,315 Buildings 14,000,914 14,000,914 Improvements 29,251,671 29,251,671 Infrastructure 27,080,590 27,080,590 Machinery & equipment 5,313,823 5,313,823 Plant, property, and equipment 150,282,914 150,282,914

Total assets 135,661,129$ 179,591,049$ 309,964,764$

LIABILITIES:Accrued liabilities 1,259,743$ 5,749,754$ 7,009,497$ Construction bonds held 361,189 361,189 Deposits payable 933,500 933,500 Interfund payables - 5,287,414 Deferred compensation 643,188 643,188 Interest payable 529,415 529,415 Deferred income 4,039,114 4,039,114 Bonds payable: Due within one year 1,505,199 3,279,000 4,784,199 Due in more than one year 23,785,000 58,423,985 82,208,985 Capital leases 8,576,280 362,507 8,938,787 Bond premiums - 1,083,686 1,083,686 Total liabilities 40,699,128 75,119,845 110,531,559

NET ASSETS:Invested in capital assets, net of related debt 57,353,833 87,133,736 144,487,569 Restricted for: Debt service 2,798,183 6,737,724 9,535,907 Public safety 28,368 28,368 Notes receivable in governmntal funds 949,668 949,668 Other purposes 31,319,467 31,319,467 Unrestricted 2,512,482 10,599,744 13,112,226 Total Net Assets 94,962,001$ 104,471,204$ 199,433,204$

The notes to the financial statements are an integral part of this statement.

CITY OF ST. GEORGE, UTAH STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2003

Program Revenues Charges for Operating Grants Capital Grants Net Governmental Business-type

Expenses Services & Contributions & Contributions Activities Activities TotalGovernmental activities:

General government 5,129,421$ 2,437,048$ -$ -$ (2,692,373)$ (2,692,373)$ Public Safety 8,394,853 1,617,529 841,720 88,795 (5,846,809) (5,846,809) Highways & public improvements 8,075,680 221,191 3,734,048 1,984,604 (2,135,838) (2,135,838) Parks, recreation & public property 6,452,697 1,463,255 1,692,275 - (3,297,166) (3,297,166) Community & economic development 1,171,405 1,287,583 258,106 374,284 374,284 Interest on long-term debt 2,052,996 (2,052,996) (2,052,996)

Total governmental activities 31,277,053 7,026,606 6,526,149 2,073,399 (15,650,898) - (15,650,898)

Business-type activities:Electric 36,461,192 36,361,434 (99,758) (99,758) Water 7,792,048 12,190,945 4,398,897 4,398,897 Wastewater collection 6,098,242 6,222,462 124,220 124,220 Regional wastewater treatment 4,256,839 7,676,278 3,000 3,422,439 3,422,439 Golf courses 4,076,795 4,219,398 15,789 158,392 158,392 Municipal bldg authority 488,345 - - (488,345) (488,345) Solid waste 2,228,373 2,264,004 35,631 35,631

Total business-type activities 61,401,835 68,934,521 18,789 - 7,551,475 7,551,475

General Revenues:Taxes:

Property taxes levied for general purposes 5,514,458 5,514,458 Property taxes levied for debt service 1,666,373 1,666,373 Franchise taxes 3,524,528 3,524,528 General sales taxes & highway sales taxes 11,942,395 11,942,395

Business licenses 378,225 378,225 Investment income 1,019,568 377,645 1,397,213 Lease payments (348,850) 666,384 317,534 Gain on sale of assets 705,575 705,575 Rents & concessions 18,340 18,340 Miscellaneous 168,802 125,236 294,038 Loss on bond refinancings - (558,427) (558,427) Transfers (695,605) 695,605 -

Total general revenues & transfers 23,893,808 1,306,443 25,200,251 Change in net assets 8,242,910 8,857,918 17,100,828

Net assets - beginning 86,719,091 95,613,284 182,332,375 Net assets - ending 94,962,001$ 104,471,202$ 199,433,203$


Other TotalGovernmental Governmental

General Funds Funds ASSETS Cash 1,710,536$ 26,613,977$ 28,324,513$ Accounts receivable 2,058,334 7,062,702 9,121,036 Prepaid expenses 314,670 314,670 Inventory 48,483 48,483 Notes receivable 949,668 949,668 Due from other funds 500,000 5,499,714 5,999,714

Total assets 5,581,690$ 39,176,392$ 44,758,082$

LIABILITIES AND FUND BALANCE

Liabilities: Construction bonds held 361,189$ 361,189$ Due to other funds 388,645 323,655 712,300 Accrued liabilities 554,650 695,973 1,250,623 Deferred revenues - 4,039,114 4,039,114

Total liabilities 1,304,484 5,058,742 6,363,226

Fund Balance: Reserved in Special revenue funds 4,915,362 4,915,362 Reserved for Debt service fund 2,798,183 2,798,183 Reserved for Capital projects fund 26,404,105 26,404,105 Reserved for Police Seizures 28,368 28,368 Reserved for Notes receivable 949,668 949,668 Unreserved - undesignated 3,299,171 3,299,171

Total fund balance 4,277,206 34,117,651 38,394,857

Total liabilities and fund balance 5,581,690$ 39,176,392$

Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds. 91,220,313 Long-term liabilitiies, including bonds payable and capital leases, are not due and payable in the current period and therefore are not reported in the funds. (35,039,082) Fund balance in Self-Insurance internal service fund 385,913

94,962,001$ The notes to the financial statements are an integral part of this statement

BALANCE SHEET

CITY OF ST. GEORGE, UTGOVERNMENTAL FUNDS TYPE

JUNE 30, 2003

Other TotalGovernmental Governmental

General Funds FundsRevenues: Taxes & special assessments 18,236,344$ $5,608,193 23,844,536$ Licenses and permits 1,618,604 - 1,618,604 Intergovernmental 2,614,535 911,946 3,526,480 Charges for services 4,424,868 - 4,424,868 Fines & forfeitures 862,990 - 862,990 Investment income 355,482 657,664 1,013,147 Rents & concessions 18,340 - 18,340 Miscellaneous 161,046 34,982 196,027 Contributions from other sources 49,313 269,317 318,630 Capital development fees - 3,576,677 3,576,677

Total revenues 28,341,522 11,058,778 39,400,301

Expenditures: Current: General government 3,355,450 849,345 4,204,795 Public safety 8,301,077 - 8,301,077 Highways & public improvements 6,394,111 - 6,394,111 Parks, recreation & public property 6,012,287 - 6,012,287 Community & economic development 1,044,881 - 1,044,881 Capital outlay - 9,482,332 9,482,332 Debt service Capital leases 72,892 275,958 348,850 Principal - 1,068,650 1,068,650 Interest & admin charges - 1,427,181 1,427,181

Total expenditures 25,180,698 13,103,466 38,284,164

Excess (deficiency) of revenues over expenditures 3,160,824 (2,044,688) 1,116,137

Other financing sources (uses): Transfers in - 8,052,500 8,052,500 Transfers out (2,482,195) (5,565,910) (8,048,105) Proceeds from sale of capital assets 70,061 600,532 670,594 Proceeds from notes/bonds/leases - 3,176,199 3,176,199 Total other financing sources (uses) (2,412,134) 6,263,322 3,851,188

Net change in fund balances 748,691 4,218,634 4,967,325

Fund balances, beginning of year, 3,528,516 29,899,016 33,427,532

Fund balances, end of year 4,277,207$ 34,117,650$ 38,394,857$


YEAR ENDED JUNE 30, 2003

CITY OF ST. GEORGE, UTGOVERNMENTAL FUNDS TYPE

STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES

Net change in fund balances - total governmental funds 4,967,325$

Amounts reported for governmental activities in the statement of activities differsfrom the amounts reported in the statement of revenues, expenditures, and changesin fund balance because:

Governmental funds report capital outlays as expenditures. However, in the statement 6,667,951 of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. 1,553,759

Issuance of long-term debt provides current financial resources in the governmental funds but increases long-term liabilities in the statement of net assets. (4,902,160)

Accrued Interest for Long-term debt is not reported as an expenditure for the current period while it is recorded in the statement of activities. This is the net change. (11,334)

Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. This is the net change. (43,664)

Internal service funds are used by management to charge the costs of self-insurance to individual funds. The net revenue of these activities of internal service funds is reported with governmental activities. 11,033

Change in net assets of governmental activities 8,242,910$



CITY OF ST. GEORGE, UTRECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDSTO THE STATEMENT OF ACTIVITIES

CITY OF ST. GEORGE, UTAH GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL


VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET

ORIGINAL FINAL ACTUAL POSITIVE (NEGATIVE)

REVENUES: Taxes: General property taxes 5,100,000$ 5,165,000$ 5,159,945$ (5,055)$ Prior year's delinquent taxes 250,000 250,000 354,513 104,513 General sales & use taxes 9,200,000 9,200,000 9,197,358 (2,642) Franchise taxes 3,750,000 3,750,000 3,524,528 (225,472)

Total taxes 18,300,000 18,365,000 18,236,344 (128,656)

Licenses & permits: Business licenses & permits 350,000 350,000 378,225 28,225 Non-business licenses & permits 765,000 849,800 1,240,379 390,579

Total licenses & permits 1,115,000 1,199,800 1,618,604 418,804

Intergovernmental revenues: Federal grants 354,000 724,192 622,061 (102,131) State grants - 45,585 128,796 83,211 Class "C" roads 1,700,000 1,700,000 1,857,785 157,785 State liquor allotment 25,000 25,000 5,893 (19,107)

Total intergovernmental revenues 2,079,000 2,494,777 2,614,535 119,758

Charges for services: Enterprise funds 1,957,700 1,957,700 1,957,700 - Public safety 622,000 622,000 754,539 132,539 Parks & public property 35,000 35,000 47,205 12,205 Cemetery 120,000 120,000 127,815 7,815 Recreation 1,247,000 1,317,000 1,335,440 18,440 Airport 175,000 190,000 142,002 (47,998) Irrigation & Reuse Center 32,000 32,000 60,168 28,168

Total charges for services 4,188,700 4,273,700 4,424,868 151,168

Fines & forfeitures: Court fines & bail forfeitures 850,000 850,000 862,990 12,990

Miscellaneous: Interest 350,000 350,000 355,482 5,482 Rents & concessions - - 18,340 18,340 Other 75,000 75,000 161,046 86,046

Total miscellaneous 425,000 425,000 534,868 109,868

Total revenues 26,957,700 27,608,277 28,292,209 683,932

Other Financing Sources : Sales of capital assets 30,000 30,000 70,061 40,061 Capital leases - - - Contributions from other entities - 53,530 49,313 (4,217) Appropriated fund balance - 2,000,000 (2,000,000) Transfers from other funds 42,300 84,830 - (84,830)

Total Other Financing Sources : 72,300 2,168,360 119,375 (2,048,985)

Total revenues & Other Financing Sources 27,030,000$ 29,776,637$ 28,411,583$ (1,365,054)$ (continued)

The notes to the financial statements are an integral part of this statement

CITY OF ST. GEORGE, UTAH GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (continued) YEAR ENDED JUNE 30, 2003

VARIANCE WITH BUDGETED AMOUNTS FINAL BUDGET

EXPENDITURES: ORIGINAL FINAL ACTUAL POSITIVE (NEGATIVE) General government: City Council 606,862$ 606,862$ 560,268$ 46,594$ City Manager 291,938 291,938 270,821 21,117 Human Resources 325,439 325,439 311,933 13,506 Administrative Services 729,000 729,000 684,303 44,697 Finance 1,024,531 1,024,531 1,014,479 10,052 Legal 516,383 516,383 513,647 2,736 Total general government 3,494,153 3,494,153 3,355,450 138,703

Public Safety: Police 5,612,953 5,994,570 5,916,333 78,237 Drug Task Force 142,364 302,364 245,208 57,156 Dispatch Center 885,001 885,001 841,231 43,770 Fire 1,375,990 1,375,990 1,298,305 77,685 Total public safety 8,016,308 8,557,925 8,301,077 256,848

Highways & public improvements: Flood Control 367,000 387,000 335,930 51,070 Public Works Administration 488,044 488,044 425,887 62,157 Streets 3,526,306 3,641,306 3,409,665 231,641 Automotive 646,962 677,962 648,175 29,787 Engineering 1,138,578 1,168,578 1,136,568 32,010 Airport 361,751 401,751 356,742 45,009 Irrigation 79,510 79,510 81,142 (1,632) Total highways & improvements 6,608,151 6,844,151 6,394,111 450,040

Parks, Recreation & Public Property: Building Maintenance 538,907 628,907 529,086 99,821 Parks and open spaces 2,238,631 2,238,631 2,054,320 184,311 Recreation & cultural arts 3,450,812 3,520,812 3,220,663 300,149 Cemetery 239,893 239,893 208,216 31,677 Total parks, recreation & public property 6,468,243 6,628,243 6,012,287 615,956

Community & economic development 1,017,562 1,131,362 1,044,881 86,481

Debt service: Capital leases 72,892 72,892 72,892 -

Total expenditures 25,677,309 26,728,726 25,180,698 1,548,028 OTHER FINANCING USES Contributions to other funds 1,352,691 3,047,911 2,482,195 565,716

TOTAL EXPENDITURES & OTHER USES 27,030,000 29,776,637 27,662,893 2,113,744

Net change in fund balance - - 748,691 748,691$

Fund Balance at beginning of year 3,528,516 3,528,516 3,528,516

Fund Balance at end of year 3,528,516$ 3,528,516$ 4,277,207$


CITY OF ST. GEORGE, UTAH

STATEMENT OF NET ASSETS PROPRIETARY FUNDS

JUNE 30, 2003

Business-type Activities - Enterprise Funds GovernmentalActivities

ELECTRIC WATER WASTEWTR MUNI-BLDG WASTEWTR Non-Major TOTALS InternalUTILITIES UTILITIES TREATMENT AUTHORITY COLLECTION Enterprise Funds 2003 Service Fund

ASSETS

Current assets: Cash -$ -$ 10,316,427$ 187,360$ 3,065,467$ 615,930$ 14,185,184$ 174,054$ Restricted cash - 540,865 6,196,327 100 - 433 6,737,724 Accts. receivable (net of 5,509,355 8,905 780 5,519,040 allowance for uncollectibles of $656,522) Inventory 1,500,691 220,828 - - - 1,721,519 Due from other funds 968,674 - - - - 968,674 Note receivable 35,210 - - - - 35,210 Bond discounts & insurance - 518,097 388,703 154,620 - 45,208 1,106,628 Prepaid expenses - 2,830 - - - 2,830 220,979

Total current assets 8,013,930 1,291,525 16,902,237 342,079 3,065,467 661,571 30,276,809 395,033

Capital assets net of accumulated depreciation 23,479,664 62,268,218 40,460,513 10,305,343 2,203,328 11,565,847 150,282,914 -

TOTAL ASSETS 31,493,595 63,559,743 57,362,750 10,647,422 5,268,796 12,227,418 180,559,723 395,033

LIABILITIES

Current liabilities: Accrued liabilities 3,839,030 1,208,315 100,404 191,556 58,693 351,757 5,749,754 9,121 Capital leases - 303,980 - - - 58,527 362,507 Due to other funds (short-term) 920,811 3,866,603 4,787,414 Deposits payable 933,500 - - - - - 933,500

Total current liabilities 5,693,340 5,378,898 100,404 191,556 58,693 410,284 11,833,174 9,121

Long-term liabilities: Bonds payable - long term - 23,858,713 28,170,272 7,146,000 - 2,528,000 61,702,985 Bond premiums - 956,187 127,499 - - - 1,083,686 Due to other funds (long-term) - - - - - 1,468,674 1,468,674

Total long-term liabilities - 24,814,900 28,297,771 7,146,000 - 3,996,674 64,255,345 -

Total liabilities 5,693,340 30,193,798 28,398,175 7,337,556 58,693 4,406,958 76,088,520 9,121

NET ASSETS

Invested in capital assets, net of related debt 23,479,664 37,149,339 12,162,742 3,159,343 2,203,328 8,979,321 87,133,736 - Restricted - 540,865 6,196,327 100 - 433 6,737,724 - Unrestricted 2,320,590 (4,324,258) 10,605,507 150,424 3,006,775 (1,159,293) 10,599,744 385,913

Total net assets 25,800,254$ 33,365,945$ 28,964,575$ 3,309,866$ 5,210,103$ 7,820,461$ 104,471,205$ 385,913$


CITY OF ST. GEORGE, UTAH STATEMENT OF REVENUES, EXPENSES, AND CHANGES

IN FUND NET ASSETS

PROPRIETARY FUNDS

YEAR ENDED JUNE 30, 2003Governmental

Business-type Activities - Enterprise Funds ActivitiesELECTRIC WATER WASTEWTR MUNI-BLDG WASTEWTR Non-Major TOTALS InternalUTILITIES UTILITIES TREATMENT AUTHORITY COLLECTION Enterprise Funds 2003 Service Fund

OPERATING REVENUES: Charges for services 33,554,656$ 9,232,571$ 5,908,858$ $ - 5,860,842$ 6,483,402$ 61,040,329$ 479,236$ Other operating revenues 2,806,778 2,958,375 1,767,419 - 361,620 - 7,894,192 Total operating revenues 36,361,434 12,190,945 7,676,278 - 6,222,462 6,483,402 68,934,521 479,236$

OPERATING EXPENSES: Electricity purchased 29,738,567 - 365,088 - 30,103,654 Water purchased 700,260 - - 700,260 Salary and wages 2,149,882 1,400,210 693,080 - 452,066 1,166,525 5,861,763 Supplies 251,377 - - - 39,414 307,648 598,438 Service vehicle expense 81,491 80,488 47,561 - 35,450 19,473 264,463 Equipment rental 20 18,139 1,931 - 791 298,555 319,435 Depreciation 1,899,531 1,469,881 905,669 114,364 223,739 360,262 4,973,446 Bad debts 162,498 45,879 - - 29,287 11,309 248,973 Payroll tax & employee benefits 794,667 552,031 274,582 - 193,285 412,515 2,227,081 Office & dept. supplies 91,749 764,625 51,447 - 7,414 95,197 1,010,432 Professional services 94,732 142,323 218,433 13,390 531,526 1,000,403 23,533 R. & M. - equipment 234,629 693,600 196,594 - 67,256 67,866 1,259,945 R. & M. - buildings and grounds 28,820 6,471 35,498 - 2,769 633,964 707,522 Insurance & surety bonds 71,737 62,438 41,911 - 22,519 31,961 230,566 Travel 35,756 26,285 7,517 - 11,697 5,381 86,635 Miscellaneous 251 (126) - - 125 Interest expense 59,596 - - - 59,596 Subscriptions & memberships 13,091 3,484 269 - 732 7,770 25,346 Lease payments - - - - - Claims paid 44,667 Insurance premiums 414,180 Contract labor - - - - 4,728,824 2,116,523 6,845,347 Billing & administration 752,800 501,900 320,000 - 283,000 100,000 1,957,700

Total operating expenses 36,461,192 6,467,886 3,159,581 127,754 6,098,242 6,166,475 58,481,130 482,380

Operating income (loss) (99,758) 5,723,059 4,516,697 (127,754) 124,220 316,928 10,453,391 (3,144)

NON-OPERATING REVENUES (EXPENSES) Interest income 43,438 19,055 243,136 7,362 60,177 4,478 377,645 6,421 Rent - - 3,000 666,384 15,789 685,172 Miscellaneous income 25,432 10,000 42,321 - 924 46,560 125,236 7,756 Loss on bond refinancing - (565,492) 7,065 - - - (558,427) Interest charges - (1,324,162) (1,097,258) (360,591) (138,694) (2,920,705)

Total non-operating revenue (expense) 68,870 (1,860,598) (801,737) 313,154 61,101 (71,868) (2,291,078) 14,177

Income before transfers (30,889) 3,862,461 3,714,960 185,400 185,321 245,060 8,162,313 11,033 Contributions - - - - - - Transfers to/from other funds - - - 695,605 - 695,605

Change in Net Assets (30,889) 3,862,461 3,714,960 881,005 185,321 245,060 8,857,918 11,033 Total net assets - beginning 25,831,143 29,503,485 25,249,614 2,428,862 5,024,782 7,575,401 95,613,287 374,880

Total net assets - ending 25,800,254$ 33,365,946$ 28,964,574$ 3,309,867$ 5,210,103$ 7,820,461$ 104,471,205$ 385,913$



STATEMENT OF CASH FLOWS PROPRIETARY FUNDS


Business-type Activities - Enterprise Funds GovernmentalActivities

ELECTRIC WATER WASTEWTR MUNI-BLDG WASTEWTR Non-Major TOTALS InternalUTILITIES UTILITIES TREATMENT AUTHORITY COLLECTION Enterprise Funds 2003 Service Fund

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers and users 37,295,591$ 16,194,624$ 7,824,703$ -$ 6,222,462$ 6,483,402$ 74,020,782$ -$ Receipts from interfund services provided 479,236 Payments to suppliers (30,450,294) (1,709,428) (1,249,410) (18,042) (5,189,122) (4,117,211) (42,733,508) Payments to employees (2,944,549) (1,952,241) (967,663) - (645,351) (1,579,040) (8,088,844) Payments for interfund services used (281,596)

Net cash provided by operating activities 3,900,748 12,532,955 5,607,630 (18,042) 387,989 787,151 23,198,431 197,640

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESRents received 3,000 666,384 15,789 685,173 Miscellaneous non-operating income 25,432 10,000 42,321 924 46,560 125,237 7,756 Economic development transfer 695,605 - 695,605

Net cash provided (used) by noncapital and related financing activities 25,432 10,000 45,321 1,361,989 924 62,348 1,506,014 7,756

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds from capital debt 12,325,000 3,385,000 - 2,840,000 18,550,000 Purchases of capital assets (1,894,628) (8,335,541) (96,669) (553,827) (329,476) (42,666) (11,252,807) Principal paid on capital debt (14,000,000) (5,844,000) (610,000) - (3,122,117) (23,576,117) Interest paid on capital debt (1,324,162) (1,097,258) (360,591) - (138,694) (2,920,705) Capital lease principal payments (92,476) - (68,766) (161,242) Loss on bond refinancing (565,492) 7,065 - (558,427) Premium on bonds issued 956,187 127,499 1,083,686

Net cash provided (used) by capital and related financing activities (1,894,628) (11,036,484) (3,518,363) (1,524,418) (329,476) (532,243) (18,835,612) -

CASH FLOWS FROM INVESTING ACTIVITIESInterest received 43,438 19,055 243,136 7,362 60,177 4,478 377,645 6,421

Net increase (decrease)in cash and cash equivalents 2,074,991 1,525,526 2,377,723 (173,109) 119,614 321,734 6,246,479 211,817 Cash and equivalents at beginning of year (2,074,991) (984,662) 14,135,031 360,570 2,945,853 294,628 14,676,429 (37,763)

Cash and equivalents at end of year (0)$ 540,864$ 16,512,754$ 187,461$ 3,065,467$ 616,362$ 20,922,908$ 174,054$

Reconciliation of operating income to net cash provided (used) by operating activities: Operating income (loss) (99,758) 5,723,059 4,516,697 (127,754) 124,220 316,928 10,453,391 (3,144) Adjustments to reconcile net income from operations to net cash provided by operating activities: Depreciation 1,899,531 1,469,881 905,669 114,364 223,739 360,262 4,973,446 Changes in assets & liabilities: Decrease (increase) in receivables (113,219) 137,076 148,425 172,282 Decrease (increase) in inventory 61,851 8,728 70,579 Decrease (increase) in interfund rec. 114,729 114,729 Decrease (increase) in discounts 330,879 (24,414) 11,044 (2,355) 315,154 Decrease (increase) in prepaid exp. 33,885 33,885 192,294 Decrease (increase) in note rec. 11,836 11,836 Increase (decrease) in deposits 40,197 40,197 Increase (decrease) in interfund pay. 920,811 3,866,603 4,787,414 Increase (decrease) in accruals 1,064,771 996,729 27,368 (15,696) 40,030 112,317 2,225,519 8,491 Total adjustments 4,000,507 6,809,896 1,090,933 109,712 263,769 470,224 12,745,041 200,785

Net cash provided by operating activities: 3,900,749$ 12,532,955$ 5,607,630$ (18,042)$ 387,989$ 787,151$ 23,198,432$ 197,641$


CITY OF ST. GEORGE, UTAH STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARY FUNDS

JUNE 30, 2003

PERPETUAL CAREPRIVATE-PURPOSE PENSION MINI GRAN PRIX TOTALS

TRUST FUND TRUST FUNDRAISER 2003************************* ********************** ********************** ********************

ASSETS

Restricted cash and investments 78,196$ 10,545,677$ -$ 10,623,874$

Total Assets 78,196 10,545,677 10,623,874

LIABILITIES

Liabilities:

Accrued liabilities - - -

Total liabilities - - - -

NET ASSETS Held in trust for pension benefits and other purposes 78,196$ 10,545,677$ -$ 10,623,874$


CITY OF ST. GEORGE, UTAHSTATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS

FOR THE YEAR ENDED JUNE 30, 2003

PERPETUAL CAREPRIVATE-PURPOSE PENSION MINI GRAN PRIX TOTALS

TRUST FUND TRUST FUNDRAISER 2003************************* ********************** ********************** ********************

ADDITIONS Retirement contributions $ - 1,005,321$ -$ 1,005,321$ Life insurance contributions - 25,647 25,647 Certificate sales 47,751 - 47,751 Net decrease in fair value of investments - 187,666 187,666 Citizen donations - - - -

Total additions 47,751 1,218,635 - 1,266,385

DEDUCTIONS Administrative & general - - 1,491 1,491 Life insurance premiums - 25,647 25,647 Retirement withdrawals - 230,391 230,391 Transfers to other governmnt agencies - - - -

Total deductions - 256,037 1,491 257,528

Change in net assets 47,751 962,597 (1,491) 1,008,857

Net assets - beginning of year 30,445 9,583,080 1,491 9,615,016

Net assets - end of year 78,196$ 10,545,677$ -$ 10,623,873$


43

CITY OF ST. GEORGE, UTNOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2003

I. Summary of significant accounting policies

A. Reporting entity

The basic financial statements of the City have been prepared in conformity withgenerally accepted accounting principles (GAAP) as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-settingbody for establishing accounting and financial reporting principles.

Financial reporting is based upon all GASB pronouncements, as well as the FASBStatements and Interpretations, APB Opinions and Accounting Research Bulletins thatwere issued on or before November 30, 1989 that do not conflict with or contradictGASB pronouncements. FASB pronouncements issued after November 30, 1989 are notfollowed in the preparation of the accompanying financial statements.

The City of St. George (City) was incorporated January 17, 1862. The City operatesunder a Council-Mayor-Manager form of government. As required by GAAP, thesefinancial statements present the City and its component units, entities for which the Cityis considered to be financially accountable. The City is considered to be financiallyaccountable for an organization if the City appoints a voting majority of that organizationor there is a potential for that organization to provide specific financial benefits to orimpose specific financial burdens on the City. The City is also considered to befinancially accountable for an organization if that organization is fiscally dependent (i.e.,it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debtwithout approval from the City). The board of directors for the DowntownRedevelopment Agency is the Mayor & City Council. As a result, the DowntownRedevelopment Fund is a component unit and is accounted for as a Capital Projects fund.

B. Government-wide and fund financial statements

The government-wide financial statements (i.e., the statement of net assets and thestatement of activities) report information on all of the nonfiduciary activities of the Cityand its component units. For the most part, the effect of interfund activity has beenremoved from these statements. Governmental activities, which normally are supportedby taxes and intergovernmental revenues, are reported separately from business-typeactivities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a

44

given function or segment are offset by program revenues. Direct expenses are thosewhich are clearly identifiable with a specific function or segment. Program revenuesinclude 1) charges to customers or applicants who purchase, use, or directly benefit fromgoods, services, or privileges provided by a given function or segment and 2) grants andcontributions that are restricted to meeting the operational or capital requirements of aparticular function or segment. Taxes and other items not properly included amongprogram revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, andfiduciary funds, even though the latter are excluded from the government-wide financialstatements. Major individual governmental funds and major individual enterprise fundsare reported as separate columns in the fund financial statements.

C. Measurement focus, basis of accounting, and financial statement presentation

The government-wide financial statements are reported using the economic resourcesmeasurement focus and the accrual basis of accounting, as are the proprietary fund andfiduciary fund financial statements. Revenues are recorded when earned and expenses arerecorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grantsand similar items are recognized as revenue as soon as all eligibility requirementsimposed by the provider have been met.

The use of financial resources to acquire capital assets are capitalized as assets in thegovernment-wide financial statements, rather than reported as an expenditure. Proceedsof long-term debt are recorded as a liability in the government-wide financial statements,rather than as an other financing source. Amounts paid to reduce long-term debt of theCity are reported as a reduction of the related liability, rather than an expenditure in thegovernment-wide financial statements.

Governmental fund financial statements are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Revenues arerecognized as soon as they are both measurable and available. Revenues are consideredto be available when they are collectible within the current period or soon enoughthereafter to pay liabilities of the current period. Expenditures generally are recordedwhen a liability is incurred, as under accrual accounting. However, debt-serviceexpenditures, as well as expenditures related to compensated absences and claims andjudgments, are recorded only when payment is due.

Sales taxes, franchise taxes, innkeeper taxes, and earned but unreimbursed state andfederal grants associated with the current fiscal period are all considered to be susceptibleto accrual and so have been recognized as revenues of the current fiscal period. Only theportion of special assessments receivable due within the current fiscal period is

45

considered to be susceptible to accrual as revenue of the current period. All otherrevenues are considered to be measurable and available only when cash is received by theCity.

The City reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accounts for allfinancial resources of the general government, except for those required to beaccounted for in another fund.

The City reports the following major proprietary funds:

The Electric Utility accounts for the activities of the City’s electric distributionoperations.

The Water Utility accounts for the activities of the City’s water production, treatment,and distribution operations.

The Wastewater Collection fund accounts for the operation and maintenance of the City-owned collection system for wastewater.

The Wastewater Treatment fund accounts for the operation and maintenance of theRegional wastewater treatment plant which also services Ivins, Santa Clara, andWashington with the City being the operator.

The Municipal Building Authority fund accounts for the lease-purchase bonds issued forconstruction of various projects throughout the City that will be owned by theAuthority and leased to another fund which will make lease payments equal to thedebt service on the related bonds.

Additionally, the City reports the following fund types:

An Internal Service fund to account for the self-insurance activities of the various fundsthroughout the City. Fiduciary funds are maintained for the activities of thePension Trust fund which accounts for the activities of the City’s definedcontribution plan, and for the Perpetual Care fund which accounts for thecollection of perpetual care fees used for the financing, operation, andmaintenance of the City owned cemeteries.

As a general rule the effect of interfund activity has been eliminated from thegovernment-wide financial statements. Exceptions to this general rule are payments tothe General Fund by various enterprise funds for the providing of administrative andbilling services for such funds. Elimination of these charges would distort the direct costsand program revenues reported for the various functions concerned.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing

46

and delivering goods in connection with a proprietary fund’s principal ongoingoperations. The principal operating revenues of all enterprise funds are charges tocustomers for sales and services. Operating expenses for enterprise funds includes thecost of sales and services, administrative expenses, and depreciation on capital assets. Allrevenues and expenses not meeting this definition are reported as nonoperating revenuesand expenses.

D. Assets, liabilities, and net assets or equity

1. Deposits and investments

Cash includes cash on hand, demand deposits with banks and other financial institutions,and deposits in other types of accounts or cash management pools that have the generalcharacteristics of demand deposit accounts. City policy allows for the investment offunds in time certificates of deposit with federally insured depositories, investment in thestate treasurer’s investment pool, and other investments as allowed by the State of Utah’sMoney Management Act. Investments are reported at fair value. The State Treasurer’sInvestment Pool operates in accordance with state laws and regulations. The reportedvalue of the pool is the same as the fair value of the pool shares.

2. Receivables and payables

Activity between funds that are representative of lending/borrowing arrangementsoutstanding at the end of the fiscal year are referred to as “due to or due from otherfunds”. In the City Electric, Water, Wastewater Collection, and Refuse Collection funds,the City records utility revenues billed to customers when meters are read on a monthlybasis. Unbilled service accounts receivable at June 30, 2003 were estimated based onJuly billings and are included in the operating revenues and accounts receivable at year-end. An allowance for uncollectible accounts is recorded as bad debt expense equal to ½of 1% of revenues in the Electric, Water, Wastewater Collection, and Refuse Collectionenterprise funds.

3. Inventories and prepaid items

Inventories of materials and supplies in the Electric and Water Funds, consistingprincipally of materials used in the repair of the transmission, distribution, collection andtreatment systems, are valued at cost and accounted for on a first-in, first-out basis(FIFO). Inventory in the General Fund is primarily supplies in the automotive divisionwhich are expended on a consumption basis. This inventory is likewise accounted for ona FIFO basis.

Certain payments to vendors reflect costs applicable to future accounting periods and arerecorded as prepaid items in both government-wide and fund financial statements.

47

4. Capital assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmentalor business-type activities columns in the government-wide financial statements. Capitalassets are defined by the City as assets with an individual cost of more than $5,000 and anestimated useful life in excess of three years. Such assets are recorded at historical costor estimated historical cost if purchased or constructed. Donated capital assets arerecorded at estimated fair market value at the date of donation. The costs of normalmaintenance and repairs that do not add to the value of the asset or materially extendassets lives are not capitalized.

Property, plant, and equipment is depreciated using the straight-line method over thefollowing estimated useful lives:

Building and improvements 10 to 100 yearsInfrastructure 15 to 100 yearsMachinery and equipment 7 to 30 years

5. Compensated absences

For governmental funds amounts of vested or accumulated vacation leave and comp timethat are not expected to be liquidated with expendable available financial resources arereported as liabilities in the government-wide statement of net assets and as expenses inthe government-wide statement of activities. No expenditures are reported for theseamounts in the fund financial statements. Vested or accumulated vacation leave andcomp time of proprietary funds is recorded as an expense and a liability of those funds asthe benefits accrue to the employees and are thus recorded in both the government-widefinancial statements and the individual fund financial statements. In accordance withGAAP, no liability or expense/expenditure is recorded for non-vesting accumulatingrights to receive sick pay benefits.

6. Long-term obligations

In the government-wide financial statements and proprietary fund types in the fundfinancial statements, long-term debt and other long-term obligations are reported asliabilities in the applicable governmental activities, business-type activities, or proprietaryfund type statement of net assets. Bond premiums, discounts, and issuance costs aredeferred and amortized over the life of the applicable debt. In the fund financialstatements, governmental fund types recognize bond premiums and discounts, as well asbond issuance costs, during the current period. The face amount of debt issued isreported as other financing sources while discounts on debt issuances are reported asother financing uses. Issuance costs, whether or not withheld from the actual debt

48

proceeds received, are reported as debt service expenditures.

7. Restricted assets

Restricted assets are comprised of cash restricted for future payments of principal andinterest on debt service as well as unexpended portions of bonds issued for capitalconstruction purposes.

II. Reconciliation of government-wide and fund financial statements

A. Explanation of certain differences between the governmental fund balance sheet andthe government-wide statement of net assets.

The governmental fund balance sheet includes a reconciliation between totalgovernmental fund balances and net assets of governmental activities as reported in thegovernment-wide statement of net assets. This difference primarily results from the long-term economic focus of the statement of net assets versus the current financial resourcesfocus of the governmental fund balance sheets.

Capital related items:When capital assets (property, plant, & equipment) that are to be used ingovernmental activities are purchased or constructed, the cost of thoseassets are reported as expenditures in governmental funds. However, thestatement of net assets includes those capital assets among the assets of theCity as a whole.

Cost of capital assets $138,878,786Accumulated depreciation (47,658,472)

Total difference $ 91,220,313

Long-term debt transactions:Long-term liabilities applicable to the City’s governmental activities arenot due and payable in the current period and accordingly are not reportedas fund liabilities in the fund financials. All liabilities (both current andlong-term) are reported in the statement of net assets. Balances at June 30,2003 were:

Downtown Redevelopment bonds $ 442,000Excise tax bonds 1,810,000Parks and recreation general obligation bonds 17,425,000Special assessment bonds 5,613,199Capital lease 8,576,280Interest payable on long-term debt 529,415

49

Compensated absences 643,188Total difference $35,039,082

B. Explanation of differences between governmental fund operating statements and thestatement of net activities.

The governmental fund statement of revenues, expenditures, and changes in fundbalances includes a reconciliation between net changes in fund balances - totalgovernmental funds and changes in net assets of governmental activities as reported in thegovernment-wide statement of activities. The first element of this reconciliation statesthat capital outlays are reported in the governmental funds as expenditures while thegovernment-wide statement of activities allocates these costs over the useful lives of theassets as depreciation. While shown in the reconciliation as the net difference, theelements of this difference are as follows:

Capital outlay $12,029,721Depreciation expense (5,361,770)

Net difference as reported $ 6,667,951

III. Stewardship, compliance, and accountability

A. Budgetary information

Annual budgets are adopted on a basis consistent with GAAP for all governmental funds.Control is maintained at the function level (i.e., general government, public safety,highways & improvements, parks & public property, etc.). All appropriations lapse atfiscal year end.

The City Council observes the following procedures in establishing the budgetary datareflected in the fund financial statements:

1) Prior to the first meeting in May, the City Manager submits to the City Councila proposed operating budget for the fiscal year commencing the following July 1st. The operating budget includes proposed expenditures and the means of financingthem. Budgets are prepared for all City funds including proprietary funds.

2) Public hearings are conducted to obtain taxpayer comments.

3) Prior to June 22nd, the budget is legally enacted through passage of an ordinance.

50

4) The City Manager is authorized to transfer budgeted amounts within functionlevels; however, to transfer budgeted amounts between function levels requiresCity Council approval. Any revisions that alter the total expenditures of any fundmust be approved through a public hearing by the City Council and can be madeat any time during the fiscal year. The General Fund budget was increased by$2,746,637 or 10.16% of the original budget. The largest amount of the increasewas to transfer to the Capital Equipment Fund the anticipated General Fundsurplus revenues for the year which were then allocated to various capital projects. This increase was for $2,000,000 or 72.82% of the total budgeted increase. Thebalance of the increase was for unanticipated expenditures and to take advantageof additional revenues which were received.

5) Although Utah State law requires the initial preparation of budgets for all Cityfunds (both governmental & proprietary), it only requires the reporting of actualversus budgets for governmental funds.

B. Tax Revenues

Property taxes are collected by the Washington County Treasurer and remitted to the Cityin two to three installments in July, December, and a final settlement in the first quarter ofthe calendar year. Taxes are levied and are due and payable on November 1st anddelinquent after November 30th of each year at which time they become liens if not paid. An accrual of uncollected current and prior year’s property taxes beyond that which wasreceived within 60 days after fiscal year end has not been made, as the amounts are notdeemed to be material.

Sales taxes are collected by the Utah State Tax Commission and remitted to the Citymonthly. An accrual has been made for all taxes received by the State for the periodended June 30th and thus due and payable to the City.

Franchise taxes are charged to various utility companies doing business with the Cityincluding telephone, cable television, gas utility, and electric utility companies. The feesare generally remitted on a monthly basis. Again an accrual has been made for all feesdue and payable to the City at June 30th.

The Innkeeper business license fee is collected at 1% of transient room rentals at motels,hotels, and R.V. parks. It is remitted to the City on a quarterly basis. Again an accrualhas been made for all fees due and payable to the City at June 30th.

C. Excess of expenditures over appropriations

For the fiscal year ended June 30, 2003, the Dixie Center Operations Special RevenueFund expenditures exceeded appropriations by $3,504.

51

D. Deficit fund equity

The SunTran Public Transit - Special Revenue Fund has a deficit balance of $252,379. The City began operating the transit system in January of 2003 and this represents theinitial startup costs for the system. It is anticipated that some federal grants may bereceived in the future to help eliminate this deficit.

The Dixie Center Operations - Special Revenue Fund has a deficit balance of $1,294. This will be made up during the 2004 fiscal year by way of additional transfers fromeither the General Fund or the Economic Development Fund.

IV. Detailed Notes for All FundsA. Cash and investments

Listed below is a summary of the cash and temporary cash investment portfolio of theCity as of June 30, 2003. Investments are governed by the Utah Money Management Act.At June 30, 2003, the carrying amount of the City's demand deposits was $4,934,157 andthe bank balance was $5,747,849. Of the bank balance $489,891 was covered by federaldepository insurance and $5,257,958 was uninsured and uncollateralized.The following table provides information about the credit and market risks associatedwith the City's temporary cash investments.

Category 1 - includes investments that are insured or registered or for which the securities areheld by the City or its agent in the City's name.

Category 2 - includes uninsured and unregistered investments for which the securities are held by the counterparty's trust department or agent in the City'sname.

Category 3 - includes uninsured and unregistered investments for which the securities areheld by the counterparty or by its trust department or agent but not in the City's name.

Category Carrying Fair 1 2 3 Amount Value

U.S. Treasury Fund $6,581,405 $6,581,405 $6,581,405

Insurance Co. Investment Contracts 10,545,677 10,545,677Investment in: Treasurer's investment pool 37,984,010 37,984,010

Total cash investments 55,111,092 55,111,092Cash & time deposits 4,934,157 4,934,157

Total cash and temporary investments $60,045,248 $60,045,248

Several funds have a cash deficit position in the pooled cash of the city. These deficitshave been recorded as due to other funds in the individual funds and recorded as due fromother funds in the Capital Equipment Capital Projects fund. Such deficits were as

52

follows:Dixie Center Operations Special Revenue Fund $ 73,010Water Utility Enterprise Fund 3,866,603Electric Utility Enterprise Fund 920,811SunTran Public Transit Special Revenue Fund 250,645

Total $5,111,069B. Deposits

Enterprise fund deposits are deposits the City requires from residential renters and anybusiness receiving a utility connection. The deposit is returnable after 3 years forresidential and 2 years for business customers upon proof of good credit performance.

C. Notes receivable

The Economic Development Special Revenue Fund has one note receivable for thepurchase of a lot in the Millcreek Industrial Park and one note receivable for the sale ofan additional piece of city-owned property on contract. The following are the borrowers,general terms, and amounts of such notes.

St. George Truss - installments of $5,676 due annually January 1st. Interest at 10% $ 8,747

Dale Jones Irrevocable Trust - interest due monthly at7%. balance due on July 1, 2003. 404,492

$ 413,239

Subsequent to year-end the $404,492 due on July 1, 2003 was paid as per the contract.

In the General Fund, an economic incentive note has been written with the developers ofthe Ft. Pierce Business Park. The agreement states that the Ft. Pierce Business Park, LC.,may borrow up to $1,200,000 from the City. Interest will accrue at 8%. Interest wascapitalized thru December 31, 1999, and thereafter has been due quarterly beginningApril 1, 2000. In addition, for each lot sold, the developers will remit to the City fromeach closing 10.88% of the gross sales proceeds to be applied to the note. At June 30,2003, the unpaid principal and interest totaled $949,668.

In the Electric Utility Fund, an economic incentive agreement has been entered into withSt. George Steel Incorporated. The City made certain improvements to the electricalsystem at the company’s place of business as an incentive to have them remain in theCity. Based upon a formula for increased utility usage and other factors, a discountedutility rate will be calculated each year to apply as payments to the note. Interest willaccrue at 8%. At June 30, 2003, the balance was $35,210.

53

D. Capital assets

Capital asset activity for the year ended June 30, 2003 was as follows:

Beginning Ending Balance Increases Decreases Balance

Governmental activities:Capital assets not being depreciated:

Land $12,508,261 3,595,807 530,752 15,573,315

Capital assets being depreciated:Buildings 18,189,005 998,279 19,187,284Improvements 35,307,901 1,272,778 36,580,679Infrastructure 50,122,663 5,759,600 55,882,263Equipment, etc 10,721,234 1,645,463 711,452 11,655,245

Total capital assets being depreciated 114,340,803 9,676,120 711,452 123,305,471

Less accum. depreciation for:Buildings 4,590,168 596,201 5,186,369Improvements 6,335,017 993,991 7,329,008Infrastructure 25,921,901 2,879,773 28,801,674Equipment etc 5,449,617 891,804 6,341,421

Total accum. depreciation 42,296,702 5,361,769 47,658,471

Total capital assets beingdepreciated, net 72,044,101 4,314,351 711,452 75,647,000

Governmental activitiescapital assets, net $84,552,362 $7,910,158 $1,242,204 $91,220,316

Beginning Ending Balance Increases Decreases Balance

Business-type activities:Capital assets not being depreciated:Land 30,359,514 85,391 30,444,905

Capital assets being depreciated:Buildings and systems 144,925,377 10,574,774 155,500,151Improvements 6,196,645 302,628 6,499,273Machinery & Equipment 10,714,428 335,190 129,073 10,920,545

Total capital assets beingdepreciated 161,836,450 11,212,592 129,073 172,919,969

54

Less accum. depreciation for:Buildings and systems 37,569,130 4,071,460 41,640,590Improvements 2,704,148 277,176 2,981,324Machinery & Equipment 7,919,133 624,809 83,897 8,460,044Total accum. depreciation 48,192,411 4,973,445 83,897 53,081,958Total capital assets being

depreciated, net 113,644,039 6,239,147 45,176 119,838,011

Business-type activitiesnet capital assets $144,003,554 6,324,538 ( 45,176) $150,282,916

In the government-wide financial statements depreciation was charged as follows byprogram or activity:

Governmental activities:General government $ 494,627Public safety 435,699Highways, streets, etc. 3,329,112Parks, recreations, etc. 1,030,383Community development 71,949

Total depreciation expense - governmental activities $5,361,770

Business-type activities:Municipal building authority $ 114,364Water utility 1,469,881Wastewater collection 223,739Electric utility 1,899,531Golf courses 360,262Regional wastewater treatment 905,669

Total depreciation expense - business-type activities $4,973,446

The City has followed the procedure of capitalizing large purchases of poles,transformers, pipes, etc. in the electric and water enterprise funds. Many of thesematerials are not used immediately upon purchase, but rather kept on hand in case of anemergency need. Upon inspection of these supplies, it was deemed to be more accurateto classify these assets as inventory rather than to capitalize them. Thus, an inventorycount was performed and an appropriate amount of the fixed assets were classified asinventory.

E. Interfund receivables, payables, and transfers

In addition to the cash deficits referred to above, at June 30, 2003, interfund balances due

55

to or from other funds was as follows:

Receivable Fund Payable Fund AmountSpecial Assessment Debt Service General Fund $388,645General Fund Golf Course Fund 500,000Electric Utility Golf Course Fund 968,674

$1,857,319

The Golf Course Fund has borrowed a total of $1,900,000 from the Electric Utility Fundfor the purchase of the Southgate Golf Course. The loan is being repaid through monthlyinstallments of $13,153.33 which includes principal and interest. The interest rate iscalculated each year on November 1st and is equal to the average interest rate earned onCity deposits invested in the state treasurer’s investment pool for the prior twelve months.

In addition to the above amounts which will be repaid by the respective funds, transferswere made which will not be repaid. Such amounts for the fiscal year ended June 30,2003 were as follows:

Fund Transferring Out Fund Receiving Transfer Amount General Fund Dixie Center Operations $ 427,000

Muni Bldg Authority 55,195Public Works Capital Proj. 700,000Capital Equip Cap. Projects 2,000,000

Economic Development Fund Muni Bldg Authority 640,410Transportation Improvmnt SunTran Public Transit Fund 128,500

Transportation Improvmnt Public Works Capital Proj. 2,420,000Capital Equipment Cap. Proj. Economic Development Fund 1,000,000Drainage Impact Fund Public Works Capital Proj. 545,000Street Impact Capital Proj. Fund Public Works Capital Proj. 700,000Downtown RDA Capital Proj. Public Works Capital Proj. 132,000

Total Interfund Transfers $ 8,748,105

F. Long-term debt

General Obligation Bonds

The City has issued general obligation bonds to provide funds for the acquisition andconstruction of major parks and recreation capital facilities throughout the City. In aspecial election in 1996, the citizens authorized the issuance of up to $18 million ingeneral obligation bonds. In January of 1997, the first installment of such bonds wereissued for $12 million. In January of 1999, the balance of $6 million was issued.

56

General obligation bonds are direct obligations of the City and pledge the full faith andcredit of the City. The first installment of 1997 G.O. bonds are due in installmentsranging from $75,000 to $1,405,000 thru August 1, 2021. The second installment of1999 G.O. bonds are due in installments ranging from $35,000 to $1,820,000 thru August1, 2023.

General obligation bonds currently outstanding at June 30, 2003 are as follows:

Governmental activities:Interest rates Amount

1997 G.O. Parks & Recreation 5.10% to 8.00% $11,520,0001999 G.O. Parks & Recreation 4.50% to 7.50% 5,905,000

$17,425,000

In addition, the City Downtown Redevelopment Agency has issued tax increment bondswhich were used for the refurbishing of a portion of the downtown part of the City. Suchbonds are treated as general obligation debt by the City as they are guaranteed by theassessment and collection of property taxes in accordance with the redevelopment laws ofthe State of Utah. The bonds were issued in two installments in 1995. The 1995A serialbonds were issued for $840,000 and are due in annual installments of $110,000 to$123,000 thru June 1, 2005 and the 1995B serial bonds were issued for $835,000 are duein annual installments of $68,000 to $141,000 thru June 1, 2005. At June 30, 2003 theoutstanding balances of such issues was a follows:


1995A Downtown Redevelopment 5.45% $233,0001995B Downtown Redevelopment 5.48% 209,000

$442,000

The City has another debt which it treats as general obligation type debt because of thenature of the debt and the revenues being used to fund the related debt service. Inaddition, in 1996, the City issued Excise Tax revenue bonds which are secured by thecollection of Class “C” road funds in the General Fund. Such bonds were originallyissued for $3,880,000 and were used for the construction of major capital asset facilitiesthroughout the City in accordance with the allowed uses of Class “C” road funds asmandated by the State of Utah. The bonds are being repaid in annual installments of$420,000 to $485,000 thru December 1, 2006. At June 30, 2003, this debts balance is asfollows:


1996 Excise Tax Revenue bonds 4.60% to 4.95% $1,810,000

57

Total City reflected General Obligation Debt $19,677,000

Annual debt service requirements to maturity for the above reflected general obligationdebt is as follows:

(In thousands of dollars)Year EndedJune 30 Principal Interest Totals 2004 $ 746 $ 1,048 $ 1,7942005 866 1,006 1,8722006 690 956 1,6462007 760 912 1,6722008 335 877 1,2122009-2013 2,605 4,002 6,6072014-2018 4,580 3,047 7,6272019-2023 7,275 1,457 8,7322024 1,820 45 1,865

Totals $19,677 $13,350 $33,027

The City over the past several years has created several special assessment districts inwhich various improvements (i.e.; streets, curb & gutter, sidewalk, etc) have beenconstructed and bonds issued for the construction costs. These bonds are being repaidfrom assessments against those property owners which have received the benefit of suchconstruction. In the event that a deficiency exists because of unpaid or delinquent specialassessments at the time a debt service payment is due, the City provides the resourcesnecessary to cover such deficit until further collection efforts can be taken to provide thenecessary funds. At June 30, 2003, the various issues outstanding are as follows:

(amounts in thousands)

Original Annual Interest Final DueDistrict Issue principal rates Date Amount 97-1 $ 265 $26 to $33 5.1% to 5.20% 8/1/08 $ 17593-1 1,872 $188 6.85% to 6.95% 12/1/04 37696-1 221 $23 to $27 5.1% to 5.15% 4/1/08 12597-2 1,651 $150 to $210 5.7% to 5.95% 11/1/09 1,24798-1 400 $36 to$51 5.55% to 5.8% 12/15/09 30299-4 1,109 $110 to $111 11/1/12 1,10999-1 989 $98 to $99 1.95% to 4.1% 2/1/13 98999-3 1,077 $107 to $108 1.85% to 4.35% 6/1/13 1,077

2000-1 228 $20 to $28 3.70% to 5.15% 6/1/12 212Total special assessment debt

$5,613

58

Annual debt service requirements to maturity for special assessment bonds are as follows:

(in thousands of dollars)Year EndedJune 30 Principal Interest Totals 2004 $ 759 $ 245 $ 1,0042005 774 212 9862006 600 177 7772007 616 153 7692008 631 126 7572009-2013 2,233 249 2,482

Totals $ 5,613 $1,162 $ 6,775

In connection with several districts, property owners against whom an assessment havebeen levied have, in a few cases, either gone bankrupt or breached their obligation tomake installments as they come due. Most of these are collectible, and even wherebankruptcy has occurred, the property affected by the levy should be available forforeclosure. As required by state law, a guarantee fund has been established within thespecial assessment debt service fund. The law requires that a tax rate of .00002 becharged to all general property taxpayers until sufficient funds are accumulated in theguarantee fund to meet statutory requirements. The requirements are that 25% of theremaining outstanding bond principal for bonds issued prior to 1987 and 10% of theremaining outstanding bond principal for bonds issued after that date. The required andmaintained balance at June 30, 2003, is $561,320.

Revenue bonds

The City has also issued bonds where the revenues and assets of the issuing fund arepledged as security for the bonds. Revenue bonds outstanding at June 30, 2003 by issueare as follows: (in thousands)

Original Annual Interest Final DueBond Descrip. Issue principal rates Date Amount 1998A MBA $6,270 $155 to $505 3.8% to 4.7% 9/1/17 $ 4,8251998A MBA Holt 400 $38 to $53 7% 10/1/08 2711999 MBACrosby 2,250 $200 to $299 7% 7/15/09 1,7272000 Woodward 350 $14 to $23 2.5% 4/1/21 323Total Municipal Bldg 9,270 7,146

1987B Water $1,274 due 1/1/13 0.00% 1/1/13 $1,2742003 Water 12,325 $760 to $1215 2.5% to 5.25% 6/1/16 12,3251995A Water 12,000 $390 to $460 4.9% to 5.6% 6/1/07 1,6902001 Water 8,670 $55 to $1,650 3.8% to 5% 6/1/20 8,570Total Water Utility 34,269 23,859

59

1988A Sewer $1,450 $72 to $73 0.00% 6/15/08 $ 3631988B Sewer 130 due 6/15/08 0.00% 6/15/08 1292003 Sewer 3,385 $820 to $875 2.5% to 4% 7/1/07 3,3851993B Sewer 4,000 $195 to $275 3.5% 6/15/14 2,5611997A Sewer 14,280 $640 to $1215 4.65% to 5.38% 6/15/17 12,5101997B Sewer 12,000 $883 to $1172 1.0% 6/15/12 9,1781997C Sewer 44 due 6/15/17 0.00% 6/15/17 44Total Wastewater

Treatment 35,289 28,170

2003 Golf Course 2,840 $396 to $452 3.95% 4/01/09 2,528

Total Business-type activities $81,668 $61,703

Revenue bond debt service requirements to maturity are as follows: (in thousands)Year EndedJune 30 Principal Interest Totals 2004 $ 3,279 $ 2,212 $ 5,4912005 5,099 2,230 7,3292006 5,014 2,065 7,0792007 5,177 1,899 7,0762008 5,432 1,718 7,1502009-2013 21,171 6,121 27,2922014-2018 13,930 2,287 16,2172019-2021 2,601 133 2,734

Totals $61,703 $18,665 $80,368

In prior years, the City defeased certain outstanding bonds by placing the proceeds of thenew bonds in irrevocable trusts to provide for all future debt service payments on the oldbonds. Accordingly, the trust accounts and the defeased bonds are not included in theCity’s financial statements. At June 30, 2003, the following outstanding bonds areconsidered defeased:

1986A Water Revenue Bonds $6,195,0001986B Water Revenue Bonds 5,170,0001991 Water Revenue Bonds 5,670,0001995A Water Revenue Bonds 8,010,0001987A Subordinated Water bonds 1,785,0001996A Municipal Building Authority bonds 2,829,0001996B Municipal Building Authority bonds 2,042,0001996C Municipal Building Authority bonds 1,066,000

60

During the current fiscal year the City current refunded the 1993 Sewer Bonds with abalance of $4,115,000, the 1999 and 2000 Golf Course bonds with a balance of$2,633,552, and the 1993 Water Bonds with a balance of $13,575,000. These refundingswere completed to take advantage of lower interest rates and thus lower the total debtservice over the life of the bonds. The old sewer bonds had an interest rate of 5.25% to5.5% while the new bonds have an interest rate of 2.5% to 4%. The prior water bondshad an interest rate of 5.1% to 5.4% while the new bonds have a rate of 2.5% to 5.25%.The prior golf course bonds had an interest rate of 4.95% to 6% while the new bondshave a rate of 3.95%.

The cash flow savings and economic gain (loss) from the current refundings is as follows:

Cash Flow Savings Economic Gain (Loss)

Water Fund $2,585,164 $2,310,848

Sewer Treatment 1,044,617 1,070,904

Golf Course (174,569) (94,469)

Changes in long-term liabilities

Long-term liability activity for the year ended June 30, 2003 was as follows: (in thousands)

Beginning Ending Due in

Balance Additions Reductions Balance OneYr

Governmental activities:

Bonds payable:

G.O. Bonds $17,520 $ - $( 95) $17,425 $ 135

RDA Bonds 623 - ( 181) 442 191

Excise Bonds 2,210 - ( 400) 1,810 420

Special assessment

debt with governmental

commitment 3,027 3,176 ( 590) 5,613 759

Total bonds payable 23,380 3,176 (1,266) 25,290 1,505

Notes payable 25 - ( 25)

Leases payable 66 - ( 60) 6 6

WCIA Lease 7,047 1,726 ( 242) 8,571

Vacation payab le 599 44 - 643 -

Governmental activity

long-term liabilities $31,117 $4,946 $(1,553) $34,510 $1,521

Business-type activities:

Bonds payable:

Revenue bonds $66,553 $18,550 $(23,400) $61,703 3,279

Capital leases 524 - ( 161) 363 111

Total business-type

long-term liabilities $67,077 $15,710 $(20,721) $62,066 $3,390

61

G. Leases payable

The City has entered into a lease agreement as lessee for financing the acquisition ofmetron water meters for the water utility. This lease agreement qualifies as a capital leasefor accounting purposes (title transfers at the end of the lease terms for a nominal $1payment) and, therefore, has been recorded at the present value of the future minimumlease payments as of the date of inception and is being depreciated in the water utilityfund. The value of the meters is $650,721. At June 30, 2003, $52,058 in depreciationhas been taken against them.

The following is a schedule of future minimum lease payments under such capital lease,and the present value of net minimum lease payments at June 30, 2003.

Fiscal year ended Business-type activityJune 30, 2004 $110,872June 30, 2005 110,872June 30, 2006 110,872

332,616Less amount representing interest ( 28,636)Present value of lease payments $303,980

The City has entered into lease agreements as lessee for financing the acquisition of apostage meter for the general fund. This lease agreement qualifies as a capital lease foraccounting purposes (title transfers at the end of the lease term for nominal $1 payment)and, therefore, has been recorded at the present value of the future minimum leasepayments as of the date of inception.

The following is a schedule of future minimum lease payments under the capital lease,and the present value of net minimum lease payments at June 30, 2003. The value of thepostage meter is $23,760.

Fiscal year ended Total governmental activitiesJune 30, 2004 $6,024Less amountrepresenting interest ( 84)Present value oflease payments $ 5,940

Washington County/St. George City Interlocal Agency

The Washington County/St. George City Interlocal Agency (the Agency) or WCIA wasformed on January 6, 1997 by Washington County and St. George City pursuant to the

62

Utah Interlocal Co-operation Act, Title 11, Chapter 13, Utah Code Annotated 1953, asamended. The Agency’s purpose is to provide for the acquisition, construction,equipping and operation and maintenance of recreational, tourist, cultural and conventionfacilities. The interlocal agreement terminates after 30 years or such later date uponwhich all bonds of the Agency and other contractual obligations have been retired, but inno event later than 50 years after January 6, 1997.

The Agency’s governing board consists of five members, two appointed by the Board ofWashington County commissioners, two members appointed by the St. George Citycouncil and one member elected by the four Agency board members. Each member isentitled to one vote; however, budgeting and financing is not effective until approved bythe Board of Commissioners and City Council. The Agency is considered a joint buildingor finance authority, as per GASB’s Codification, Section J50.109. The Agency’sseparate financial statements are available by calling 435-628-7003.

The City subleases an undivided 38% interest in the convention center facilities fromWashington County, which has a master lease for rental of the facilities owned by theAgency. The County will make base lease payments to the Agency equal to the Agency’sbond payments over a period of 25 years. The County will receive from the City subleasepayments totaling $10,179,096 over the 25 year period with annual payments rangingfrom $304,057 to $578,188. The Agency’s right and interest in the facilities will betransferred to Washington County and St. George City upon payment by the County andthe City of the then applicable purchase option price, or all the base rentals, or upondischarge of the lien on the Indenture.

The lease is considered a capital lease based on GASB’s Codification, Section L.20.119-122 and FASB’s Statement 13. The following is an annual schedule of future minimumlease payments and St. George City’s sublease payments:

Dixie Center Museum Land

Fiscal year ended Debt Service Debt Service Purchase

June 30, 2004 $474,232 $ 123,348 $ 63,397

June 30, 2005 484,553 123,454 63,221

June 30, 2006 498,621 123,394 63,221

June 30, 2007 521,111 123,171 63,221

June 30, 2008 527,094 122,406 136,510

2009-2013 2,232,032 612,262 679,811

2014-2018 1,659,875 609,392 678,867

2019-2023 2,088,553 383,770 677,260

2024 - - 135,327

Total remaining minimum lease payments $8,486,071 $2,221,197 $2,560,835

Less amount representing interest (2,991,071) ( 871,817) ( 834,875)

Present value of net remaining minimum

lease payments $5,495,000 $1,349,380 $1,725,960

For the fiscal year ended June 30, 2003 expenditures were payments for O&M of$517,830 and debt service payments of $427,956.

63

H. Segment information

The City issued revenue bonds to finance the purchase of the Sunbrook Golf Course andalso for the construction of the Sunbrook Golf Course clubhouse. Investors in therevenue bonds rely solely on the revenue generated by the golf courses for repayment ofprincipal and interest on the bonds. Summary financial information for the golf courses ispresented below.

CONDENSED STATEMENT OF NET ASSETS

Assets:Cash and investments $ 342,946Other assets (deferred bond costs) 45,208Capital assets $14,571,909

Less depreciation ( 3,006,061) 11,565,848Total assets 11,954,002

Liabilities:Accrued liabilities 171,694Due to other funds 1,468,674Noncurrent liabilities 2,586,527

Total liabilities 4,226,895

Net assets:Invested in capital assets net of related debt 8,979,321Restricted 433Unrestricted (1,252,647)

Total net assets $7,727,107

CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS

Golf course charges $4,219,398Depreciation expense (360,262)Other operating expenses (3,577,839)

Operating income 281,297Nonoperating revenues (expenses)

Interest income 4,478Rental income 15,789Miscellaneous income 46,560Interest expense ( 138,694)Change in net assets 209,429

64

Beginning net assets 7,517,678Ending net assets $ 7,727,107

CONDENSED STATEMENT OF CASH FLOWS

Net cash provided (used) by:Operating activities $ 571,458Noncapital financing activities 62,348Capital and related financing activities ( 532,243)Investing activities 4,478

Net increase (decrease) 106,041Beginning cash & cash equivalents 236,905Ending cash & cash equivalents (deficit) $ 342,946

V. Other information

A. Risk management

The City, effective July 1, 1991, is self-insured up to $50,000 for general liability, lawenforcement liability, and auto liability with excess insurance up to $10,000,000. Property is covered by a blanket all risk policy with limits of up to $83,687,846. Royaland SunAlliance administers the insurance policies above what the City provides as self-insurance.

6/30/03 6/30/02Unpaid claims beginning of fiscal year $ 630 $ -Incurred claims 53,158 107,090Claim payments (44,667) (106,460)Unpaid claims, end of fiscal year $ 9,121 $ 630

B. Contingent liabilities

Amounts received or receivable from grant agencies are subject to audit and adjustmentby grantor agencies, principally the federal government. Any disallowed claims,including amounts already collected, may constitute a liability of the applicable fund. The amount, if any, of expenditures that may be disallowed by the grantor cannot bedetermined at this time, although the City expects such amounts, if any, to be immaterial.

The City is a defendant in various lawsuits. Although the outcome of these lawsuits isnot presently determinable, in the opinion of the City’s counsel the resolution of thesematters will not have a material adverse effect on the financial condition of the City. Acontingent liability of less than $250,000 is estimated to be possible.

C. Jointly governed organization

65

The City, in conjunction with 38 other governmental entities that provide for the purchaseand transmission of electrical services, created the Utah Association of Municipal PowerSystem (UAMPS). UAMPS owns interest in various power generation entities as well ascoordinating the purchase of additional power on the open spot-market. The UAMPsboard is comprised of one member from each participating entity (dependent on theparticular projects which an entity elects to participate in). Except for minimum purchaserequirements, no participant has any obligation, entitlement, or residual interest. TheCity’s electrical utility fund purchased power totaling $27,806,184 during the fiscal yearended June 30, 2003.

D. Conduit debt obligations

From time to time, the City has issued Industrial Revenue Bonds (IRBs) to providefinancial assistance to private-sector entities for the acquisition and construction ofindustrial and commercial facilities deemed to be in the public interest. The bonds aresecured by the property financed and are payable solely from payments received onunderlying mortgage loans. Upon repayment of the bonds, ownership of the acquiredfacilities transfers to the private-sector entity served by the bond issuance. Neither theCity, the State, nor any political subdivision thereof is obligated in any manner forrepayment of the bonds. Accordingly, the bonds are not reported as liabilities in theaccompanying financial statements.

As of June 30, 2003, there had been twenty-one series of Industrial Revenue Bondsissued. The aggregate principal amount payable could not be determined; however, theiroriginal issue amounts totaled $52.8 million.

E. Commitments/subsequent events

1) The City has entered into an agreement with Washington County School District forthe possible additional purchase of property from the district. The agreements are subjectto appropriation of the needed funds in the applicable years of purchase. The terms of theagreement are as follows:

A) On or before July 31, 2003, the City will make a payment of $400,000 to theschool district . At such time, the school district shall convey to the City bywarranty deed marketable fee simple title a total of .717 acres within Lot 4, block16, Plat “A”, of the St. George City survey.

B) On or before July 31, 2007, the City will make a payment of $818,300 to theschool district. At such time, the school district shall convey to the City bywarranty deed marketable fee simple title a total of 2.42 acres within Block 17,

66

Plat “A”, of the St. George City survey.

F. Uses of impact fees

The City collects on each building permit issued, various impact fees restricted as to theiruse. In order to comply with legislation passed by the Utah State legislature, thefollowing disclosures are made as to the revenues collected and disbursements made forthe various fees.

1) Park Impact Capital Projects FundRevenues: Impact fees collected $1,409,800

Interest income 53,063Total revenues $1,462,863

Expenditures: Professional fees 541 Debt service 10,000 Capital outlay 667,046

Total expenditures ( 677,587)Increase in fund balance 785,276Beginning fund balance 2,463,994Ending fund balance $ 3,249,270

2) Street Impact Capital Projects FundRevenues: Impact fees collected $864,315

Interest income 16,748Total revenues $881,062

Expenditures: Capital transfers 700,000 Professional fees 541

Total expenditures ( 700,541)Increase in fund balance 180,521Beginning fund balance 587,671Ending fund balance $ 768,192

3) Drainage Impact Capital Projects FundRevenues: Impact fees collected $498,365


Expenditures: Professional fees 5,708 Capital transfers 545,000 Capital outlay 4,062

Total expenditures ( 554,770)

67

Decrease in fund balance ( 48,707) Beginning fund balance 242,378Ending fund balance $ 193,671

4) Fire Department Impact Capital Projects FundRevenues: Impact fees collected $253,162


Expenditures: Professional fees 541 Building construction 52,087

Total expenditures ( 52,628)Increase in fund balance 214,071Beginning fund balance 592,304Ending fund balance $ 806,374

5) Police Department Impact Capital Projects FundRevenues: Impact fees collected $ 64,287

Interest income 293Total revenues $ 64,580

Expenditures: Professional fees 541 Lease payments 85,000

Total expenditures ( 85,541)Decrease in fund balance ( 20,961)Beginning fund balance 27,256Ending fund balance $ 6,295

6) Water Utility Enterprise FundRevenues: Impact fees collected $2,659,827

Interest income - Total revenues $2,659,827

Expenditures: 1995A Bond debt service $ 482,995 Capital outlay 2,000,000

Total expenditures (2,482,995)Increase in fund balance 176,832 Beginning fund balance (13,019,338)Ending fund balance $(12,842,506)

7) Wastewater Collection Enterprise FundRevenues: Impact fees collected $361,620

68

Interest income - Total revenues $361,620

Expenditures: Capital outlay $223,739

Total expenditures ( 223,739)Increase in fund balance 137,881 Beginning fund balance 62,309Ending fund balance $ 200,190

8) Electric Utility Enterprise FundRevenues: Impact fees collected $1,719,684

Interest income - Total revenues $1,719,684

Expenditures: Capital outlay $ 947,314

Total expenditures ( 947,314)Increase in fund balance 772,370Beginning fund balance (2,183,834)Ending fund balance $( 1,411 464)

9) Wastewater Treatment Enterprise FundRevenues: Impact fees collected $1,752,481

Interest income 14,938Total revenues $1,767,419

Expenditures: Debt service $3,000,000 Capital outlay -

Total expenditures (3,000,000)Decrease in fund balance (1,232,581) Beginning fund balance (8,072,987)Ending fund balance $ (9,305,568)

G. Downtown Redevelopment Fund required disclosures

In accordance with Section 17A-2-12117(3), the City’s redevelopment agency ( acomponent unit which is included as a capital project fund in this financial report) isrequired to disclose the following information:

1) The tax increment collected by the agency for each project area.A) The Downtown Redevelopment agency for the City is one project area.The total tax increment collected was $615,000.

2) The amount of tax increment paid to any taxing agency pursuant to Section

69

17A-2-1258.A) No amounts were paid to others.

3) The outstanding principal of bonds and other loans incurred to finance projectsin the area.

A) 1995A Serial bonds $233,000B) 1995B Serial bonds $209,000

4) The actual amount expended for:A) acquisition of property $0B) site improvements or preparation costs $25,729C) installation of public utilities or other public improvements $0D) administrative costs of the agency $2,272

H. Employee retirement systems and pension plans

Defined Benefit Pension Plan

The City of St. George contributes to the Local Government Contributory RetirementSystem and Local Governmental Noncontributory Retirement System, Public SafetyRetirement System for employers with Social Security coverage, Firefighters RetirementSystem which are for employers with Social Security coverage; all of which are cost-sharing multiple-employer defined benefit pension plans administered by the UtahRetirement Systems (Systems). Utah Retirement Systems provide refunds, retirementbenefits, annual cost of living allowances and death benefits to plan members andbeneficiaries in accordance with retirement statutes established and amended by the statelegislature.

The Systems are established and governed by the respective sections of Chapter 49 of theUtah Code Annotated 1953 as amended. The Utah State Retirement Office Act inChapter 49 provides for the administration of the Utah Retirement Systems and Plansunder the direction of the Utah State Retirement Board (Board) whose members areappointed by the Governor. The Systems issue a publicly available financial report thatincludes financial statements and required supplementary information for the LocalGovernmental Contributory Retirement System, Local Governmental NoncontributoryRetirement System, Public Safety Retirement System for employers with Social Securitycoverage, and Firefighters Retirement System which are for employers with SocialSecurity coverage. A copy of the report may be obtained by writing to the UtahRetirement Systems, 540 East 200 S, Salt Lake City, UT 84102 or by calling1-800-365-8772.

Funding Policy: Plan members are required to contribute a percent of their coveredsalary (all or part may be paid by the employer) to the respective systems to which they

70

belong; 6.0% to the Contributory and 7.82% to the Firefighter’s Retirement Systemsrespectively. The City of St. George is required to contribute a percent of covered salaryto the respective systems, 4.68% to the Contributory, 8.69% to the Noncontributory, and13.89% to the Public Safety Noncontributory. The contribution rates are the actuariallydetermined rates and are approved by the Board as authorized by Chapter 49.

The City of St. George contributions to the various systems for the years ending June 30,2003, 2002, and 2001 respectively were; for the Contributory System, $34,313, $33,900,and $42935; for the Noncontributory System, $981,576, $827,977, and $955,695; for thePublic Safety Noncontributory, $397,595, $362,367, and $420,211; and for theFirefighters System, $29328, $21,538, and $30,484 respectively. The contributions wereequal to the required contributions for each year.

Defined Contribution Plan

The City also provides pension benefits for all its full-time employees through a definedcontribution plan administered by ICMA Retirement Corporation. In a definedcontribution plan, benefits depend solely on amounts contributed to the plan plusinvestment earnings. Employees are eligible to participate from the date of employment.The contribution rates established by the City Council are 5.37% for non-exemptemployees covered by the Contributory, 7.36% for non-exempt employees covered by theNon-contributory, 8.23% for Firefighters covered by the Contributory, 2.16% for PublicSafety Noncontributory systems of the State Systems referred to above and 16.05% fordepartment heads exempt from the State Systems. The contributions to the plan totaled$1,030,968 which represents all required contributions. Because it is a definedcontribution plan, all amounts are vested and there is no unfunded liability.

Deferred Compensation Plan

The City offers its employees a deferred compensation plan created in accordance withInternal Revenue Code 457. The plan, available to all full-time City employees, permitsthem to defer a portion of their salary until future years. Participation in the plan isoptional. The deferred compensation is not available to employees until termination,retirement, death or an unforeseeable emergency. The City of St. George has adoptedGovernmental Accounting Standards Board Statement 32 (GASB No. 32), “Accountingand Financial Reporting for Internal Revenue Code Section 457 Deferred CompensationPlans”. This has resulted in the reporting of the 457 Plans as a “Trust Fund” rather thanpreviously as an “Agency Fund”. Now all of the assets and income of the 457 Plan areheld in trust for the exclusive benefit of the participants or their beneficiaries rather thanthe assets of the City. The plan is invested with and administered by the Utah StateRetirement Systems and the ICMA.

Debt Service Funds

Airport Economic Transportation SunTran Recreation SpecialAssets Dixie Center Ops PFC Fees Development Improvement Public Transit Bonds Assessments

Cash and investments -$ 459,450$ 1,197,575$ 2,591,676$ 100$ 287,730$ 303,402$ Receivables: Accounts 71,716 413,239 511,246 - - 5,857,520 Due from other funds - - - - - - 388,645

Total assets 71,716$ 459,450$ 1,610,814$ 3,102,922$ 100$ 287,730$ 6,549,567$

Liabilities and Fund Balances

Liabilities: Accounts payable -$ -$ -$ 4,150$ 1,835$ -$ -$ Deferred revenues - - - - - - 4,039,114 Due to other funds 73,010 - - - 250,645 - -

Total liabilities 73,010 - - 4,150 252,479 - 4,039,114

Fund balances: Reserved, reported in: Special revenue funds (1,294) 459,450 1,610,814 3,098,772 (252,379) - Debt service funds - - - - - 287,730 2,510,453 Capital project funds - - - - - - -

Total fund balances (1,294) 459,450 1,610,814 3,098,772 (252,379) 287,730 2,510,453

Total liabilities and and fund balances 71,716$ 459,450$ 1,610,814$ 3,102,922$ 100$ 287,730$ 6,549,567$

(continued)

Special Revenue Funds

City of St. George, UT Non-Major Governmental Funds

Combining Balance Sheet June 30, 2003

(continued)

Capital Projects FundsSpecial

Capital Downtown Park Street Assessment Drainage Fire Dept Police Streets Recreation Public Works Future AirportAssets Equipment RDA Impact Impact Constructn Impact Impact Impact Bond Bonds Capital Proj. Capital Proj. Totals

Cash and investments 4,307,731$ 784,443$ 3,253,656$ 728,193$ -$ 195,243$ 806,374$ 6,295$ 4$ 1,748,558$ 9,937,120$ 6,427$ 26,613,977$ Receivables: Accounts - - - 40,000 - - - - - - 168,980 - 7,062,702 Advances to other funds 5,111,069 - - - - - - - - - - - 5,499,714

Total assets 9,418,799$ 784,443$ 3,253,656$ 768,193$ -$ 195,243$ 806,374$ 6,295$ 4$ 1,748,558$ 10,106,100$ 6,427$ 39,176,392$

Liabilities and Fund Balances

Liabilities: Accounts payable 18,981$ 3,225$ 4,386$ -$ -$ 1,572$ -$ -$ -$ 2,164$ 658,883$ 778$ 695,973$ Deferred revenues - - - - - - - - - - - - 4,039,114 Advances from other funds - - - - - - - - - - - - 323,655

Total liabilities 18,981 3,225 4,386 - - 1,572 - - - 2,164 658,883 778 5,058,742

Fund balances: Reserved, reported in: Special revenue funds - - - - - - - - - - - - 4,915,362 Debt service funds - - - - - - - - - - - - 2,798,183 Capital project funds 9,399,819 781,218 3,249,270 768,193 - 193,671 806,374 6,295 4 1,746,395 9,447,217 5,650 26,404,105

Total fund balances 9,399,819 781,218 3,249,270 768,193 - 193,671 806,374 6,295 4 1,746,395 9,447,217 5,650 34,117,651

Total liabilities and and fund balances 9,418,799$ 784,443$ 3,253,656$ 768,193$ -$ 195,243$ 806,374$ 6,295$ 4$ 1,748,558$ 10,106,100$ 6,427$ 39,176,392$

City of St. George, UT Non-Major Governmental Funds

Combining Balance Sheet June 30, 2003

CITY OF ST. GEORGE, UTNONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES


Special Revenue Funds Debt Service Funds

Dixie Center Airport Economic Transportation SunTran Recreation Special Operations PFC Fees Development Improvement Public Transit Bonds AssessmentsRevenues: Taxes & fees 258,106$ 26,836$ -$ 2,745,037$ 19,021$ 1,051,373$ -$ Assessments - - - - - - 892,819 Intergovernmental - - - - - - - Investment income - 8,700 29,110 76,607 - 381 284,545 Capital development fees - - - - - - - Other - - - - - - -

Total revenues 258,106 35,535 29,110 2,821,645 19,021 1,051,754 1,177,364

Expenditures: Current: General government 517,830 541 2,148 62,075 217,846 1,341 8,825 Public Safety Highways & improvements Parks, recreation etc Community & Econ Developmnt Lease payments - Debt service: Principal on long-term debt 171,400 95,000 590,524 Interest on long-term debt 256,556 954,423 177,894 Capital outlay: - 863,401 182,055 - -

Total expenditures 945,786 541 2,148 925,476 399,901 1,050,763 777,242

Excess (deficiency) of revenues over expenditures (687,680) 34,994 26,962 1,896,169 (380,880) 990 400,122

Other financing sources (uses): Transfers in 427,000 - 1,000,000 - 128,500 - - Transfers out - - (640,410) (2,548,500) - - Bonds sold Property sales Contributions from private sources Contributions from other governmnts 269,317 Capital Leases - Notes payable - - - - - - Total other financing sources (uses) 696,317 - 359,590 (2,548,500) 128,500 - -

Net change in fund balances 8,637 34,994 386,552 (652,331) (252,380) 990 400,122

Fund balances, beginning of year (9,931) 424,456 1,224,262 3,751,103 - 286,740 2,110,332

Fund balances, end of year ($1,294) $459,450 $1,610,814 $3,098,772 ($252,380) $287,730 $2,510,454(continued)

CITY OF ST. GEORGE, UTNONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURESAND CHANGES IN FUND BALANCES

YEAR ENDED JUNE 30, 2003(continued)

Capital Projects FundsSpecial

Capital Downtown Park Street Assessment Drainage Fire Dept Police Streets Recreation Public Works Future Airport Equipment RDA Impact Impact Constructn Impact Impact Impact Bond Bonds Capital Proj. Capital Proj. TotalRevenues: Taxes -$ 615,000$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 4,715,374$ Assessments - - - - - - - - - - - - 892,819 Intergovernmental 504,961 - - - - - - - - - 12,253 394,731 911,946 Investment income - 14,290 53,063 16,748 - 7,698 13,537 293 - 37,139 115,555 - 657,664 Capital development fees - - 1,409,800 864,315 486,748 498,365 253,162 64,287 - - - - 3,576,677 Other 24,000 - - - - - - - - - 10,982 - 34,982

Total revenues 528,961 629,290 1,462,863 881,062 486,748 506,063 266,699 64,580 - 37,139 138,791 394,731 10,789,461

Expenditures: Current: General government 541 2,272 541 541 - 5,708 541 541 - 27,513 541 - 849,345 Public Safety - Highways & improvements - Parks, recreation etc - Community & Econ Developmnt - Lease payments 190,958 85,000 275,958

Debt service: Principal on long-term debt 206,000 5,727 1,068,650 Interest on long-term debt 34,036 4,273 1,427,181

Capital outlay: 2,634,671 25,729 667,046 126,774 4,062 52,087 - 470,705 4,066,721 389,081 9,482,332

Total expenditures 2,635,212 458,994 677,587 541 126,774 9,770 52,628 85,541 - 498,218 4,067,262 389,081 13,103,466

Excess (deficiency) of revenues over expenditures (2,106,251) 170,296 785,276 880,521 359,974 496,293 214,071 (20,961) - (461,079) (3,928,472) 5,650 (2,314,005)

Other financing sources (uses): Transfers in 2,000,000 - - - - - - - - - 4,497,000 - 8,052,500 Transfers out (1,000,000) (132,000) - (700,000) - (545,000) - - - - - - (5,565,910) Bonds sold 3,176,199 3,176,199 Property sales 600,532 600,532 Contributions from private sources - - - Contributions from other governmnts 269,317 Capital leases - Notes payable - - - - - - - - - - - - - Total other financing sources (uses) 1,600,532 (132,000) - (700,000) 3,176,199 (545,000) - - - - 4,497,000 - 6,532,639

Net change in fund balances (505,718) 38,296 785,276 180,521 3,536,173 (48,707) 214,071 (20,961) - (461,079) 568,528 5,650 4,218,634

Fund balances, beginning of year 9,905,538 742,922 2,463,994 587,671 (3,536,173) 242,378 592,303 27,256 4 2,207,474 8,878,689 - 29,899,018

Fund balances, end of year $9,399,820 $781,218 $3,249,270 $768,192 ($0) $193,671 $806,374 $6,295 $4 $1,746,395 $9,447,217 $5,650 $34,117,652

Business-type Activities

Golf TotalAssets Refuse Collection Courses Non-Major

Cash and investments 273,416$ 342,513$ 615,930$ Restricted cash - 433 433 Furniture, Fixtures, & equip - 14,571,909 14,571,909 Less depreciation - (3,006,061) (3,006,061) Other assets (deferred bond costs) - 45,208 45,208

Total assets 273,416 11,954,002 12,227,418

Liabilities

Liabilities: Accrued liabilities 180,063$ 171,694 351,757 Due to other funds 1,468,674 1,468,674 Leases payable 58,527 58,527 Bonds payable 2,528,000 2,528,000 Total liabilities 180,063 4,226,895 4,406,958

Net Assets Invested in capital assets, net of related debt - 8,979,321 8,979,321 Restricted for debt service 433 433 Unrestricted 93,354 (1,252,647) (1,159,293)

Total Net Assets 93,354$ 7,727,107$ 7,820,460$

Enterprise Funds

City of St. George, UT NonMajor Proprietary Funds

Combining Statement of Net Assets June 30, 2003

Business-type Activities

Golf TotalRefuse Collection Courses Non-Major

OPERATING REVENUES: Charges for services 2,264,004$ 4,219,398$ 6,483,402 Other operating revenues - Total operating revenues 2,264,004 4,219,398 6,483,402

OPERATING EXPENSES: Salary and wages 1,166,525 1,166,525 Supplies 307,648 307,648 Service vehicle expense 19,473 19,473 Equipment rental 298,555 298,555 Depreciation 360,262 360,262 Bad debts 11,309 11,309 Payroll tax & employee benefits 412,515 412,515 Office & dept. supplies 95,197 95,197 Professional services 541 530,985 531,526 R. & M. - equipment 67,866 67,866 R. & M. - buildings and grounds 633,964 633,964 Insurance & surety bonds 31,961 31,961 Travel 5,381 5,381 Subscriptions & memberships 7,770 7,770 Contract labor 2,116,523 2,116,523 Claims paid Insurance premiums Billing & administration 100,000 100,000

Total operating expenses 2,228,373 3,938,101 6,166,475

Operating income (loss) 35,631 281,297 316,928

NON-OPERATING REVENUES (EXPENSES) Interest income 4,478 4,478 Rent 15,789 15,789 Miscellaneous income 46,560 46,560 Interest charges (138,694) (138,694)

Total non-operating revenue (expense) - (71,868) (71,868)

Income before transfers 35,631 209,429 245,060

Changes in Net Assets 35,631 209,429 245,060 Total Net Assets - beginning of year 57,723 7,517,678 7,575,401

Total Net Assets - end of year 93,354$ 7,727,107$ 7,820,461$

Enterprise Funds

City of St. George, UT NonMajor Proprietary Funds

Combining Statement of Revenues, Expenses, and Changes in Fund Net AssetsFor the Year Ended June 30, 2003

CITY OF ST. GEORGE, UTAH NONMAJOR PROPRIETARY FUNDS COMBINING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2003

Business-type Activities - Enterprise Funds

REFUSE GOLF TOTALCOLLECTION COURSES NON-MAJOR

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers and users 2,264,004$ 4,219,398$ 6,483,402$ Payments to suppliers (2,048,310) (2,068,901) (4,117,211) Payments to employees - (1,579,040) (1,579,040)

Net cash provided by operating activities 215,694 571,458 787,151

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESRents received 15,789 15,789 Miscellaneous non-operating income 46,560 46,560

Net cash provided (used) by noncapital and - related financing activities - 62,348 62,348

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds from capital debt 2,840,000 2,840,000 Purchases of capital assets (42,666) (42,666) Principal paid on capital debt (3,122,117) (3,122,117) Interest paid on capital debt (138,694) (138,694) Capital lease principal payments (68,766) (68,766)

Net cash provided (used) by capital and related financing activities - (532,243) (532,243)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received - 4,478 4,478

Net increase (decrease)in cash and cash equivalents 215,694 106,041 321,735 Cash and equivalents at beginning of year 57,723 236,905 294,628

Cash and equivalents at end of year 273,417$ 342,946$ 616,363$

Reconciliation of operating income to net cash provided (used) by operating activities: Operating income (loss) 35,631$ 281,297$ 316,928$ Adjustments to reconcile net income from operations to net cash provided by operating activities: Depreciation - 360,262 360,262 Changes in assets & liabilities: Increase (decrease) in prepaid assets Decrease (increase) in discounts (2,355) (2,355) Increase (decrease) in accruals 180,063 (67,746) 112,317 Total adjustments 180,063 290,161 470,224

Net cash provided by operating activities: 215,694$ 571,458$ 787,151$

CITY OF ST. GEORGE, UTAH CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE

JUNE 30, 2003

GOVERNMENTAL FUNDS CAPITAL ASSETS:

Land 15,573,315$ Buildings 19,187,284 Improvements 36,580,679 Infrastructure assets 55,882,263 Equipment 11,655,245

Total Governmental Funds Capital Assets 138,878,786$

INVESTMENTS IN GOVERNMENTAL FUNDS CAPITAL ASSETS BY SOURCE: Capital Projects Funds: General obligation bonds 21,706,189$ Federal grants 5,252,331 State grants 633,195 County grants 20,000 WCIA - (Dixie Center interlocal agency) 10,207,697 Downtown Redevelopment revenues 3,242,982 Capital equipment fund 13,757,956 Public Works Capital projects fund 4,338,115 Replacement Airport capital projects fund 389,081 Industrial Park fund 2,401,462 Sewer Impact fund 245,866 Park Impact fund 6,370,646 Fire Impact fund 915,459 Drainage Impact fund 229,844 Special Assessment fund 22,902,766 Street Impact fund 400,205 Transportation improvement fund 1,241,736 SunTran Public Transit fund 169,306 Airport PFC fund 22,049 General Fund revenues 44,431,901

Total Governmental Funds Capital Assets 138,878,786$

CITY OF ST. GEORGE, UTAHCAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY


GOVERNMENTAL GOVERNMENTALFUNDS CAPITAL FUNDS CAPITAL

ASSETS ASSETS FUNCTION AND ACTIVITY JULY 1, 2002 ADDITIONS DELETIONS JUNE 30, 2003

GENERAL GOVERNMENT: Gen. government bldgs. 6,767,040$ 3,154,192$ 400,752$ 9,520,480$ WCIA - Dixie Center 10,255,803 - - 10,255,803 Downtown Redevelopment 4,611,370 - - 4,611,370 Industrial Park 1,626,676 - - 1,626,676 Administration 597,442 26,593 - 624,035

23,858,331 3,180,785 400,752 26,638,364

PUBLIC SAFETY: Police protection 3,053,757 589,746 495,579 3,147,924 Fire protection 3,364,089 537,919 - 3,902,008

6,417,846 1,127,665 495,579 7,049,932

PUBLIC WORKS: 64,582,770 6,553,810 192,757 70,943,823 PARKS, RECREATION, & PUBLIC PROPERTY: 31,990,117 2,409,666 153,116 34,246,667

TOTAL GOVERNMENTAL FUND CAPITAL ASSETS 126,849,064$ 13,271,926$ 1,242,204$ 138,878,786$

CITY OF ST. GEORGE, UTAHSCHEDULE OF CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS

BY FUNCTION & ACTIVITY

JUNE 30, 2003

FUNCTION AND ACTIVITY TOTAL LAND BUILDINGS IMPROVEMENTS INFRASTRUCTURE EQUIPMENT

GENERAL GOVERNMENT: Gen. government bldgs. 9,520,479$ 6,517,804$ 2,507,646$ 495,029$ $ - $ - WCIA (Dixie Center) 10,255,803 1,774,067 8,481,736 - - - Downtown Redevelopment 4,611,370 2,080,452 1,062,008 1,468,910 - - Community development (Industrial Park) 1,626,676 162,489 - 1,464,187 - - Administration 624,035 - - - - 624,035

Total general government 26,638,363 10,534,812 12,051,390 3,428,126 - 624,035

PUBLIC SAFETY: Police protection 3,147,924 - 82,589 93,968 - 2,971,367 Fire protection 3,902,008 113,048 1,410,421 72,133 - 2,306,406

Total public safety 7,049,932 113,048 1,493,010 166,101 - 5,277,773

PUBLIC WORKS: 70,943,824 557,709 2,266,752 8,752,478 55,764,342 3,602,543 PARKS, RECREATION, & PUBLIC PROPERTY: 34,246,667 4,367,746 3,376,132 24,233,974 117,921 2,150,894

Total governmental fund capital assets allocated to function 138,878,786$ 15,573,315$ 19,187,284$ 36,580,679$ 55,882,263$ 11,655,245$

101


ELECTRIC FUND

STATISTICAL ANALYSIS

JUNE 30, 2003

Year Ended June 30, 2003 2002

Production Cost Analysis:

Kilowatt hours generated 9,357,918 20,870,723 Kilowatt hours purchased 541,387,750 482,861,277 Total Kilowatt Hours 550,745,668 503,732,000 =========== ===========

Total Operating Costs $36,461,192 $41,518,730 ========== =========== Cost per Kilowatt Hour $ .06620 $ .08242 ========== ===========

Summary of Kilowatt Hours and Costs for previous period COST PER YEAR KILOWATT HOURS KILOWATT HOUR 1993 317,653,622 .05091 1994 346,738,642 .04966 1995 369,089,363 .05412 1996 392,034,761 .05297 1997 419,976,185 .05306 1998 426,475,844 .05117 1999 456,043,750 .04957 2000 470,326,067 .05708 2001 494,674,942 .07468 2002 503,732,000 .08242 2003 550,745,668 .06620

2003 2002Average Revenue Analysis: Kilowatt Hours billed 477,364,769 467,707,308 Unbilled Hours-line loss, street lights 73,380,899 36,024,692 Total Kilowatt Hours 550,745,668 503,732,000 =========== ===========

Total Revenue Billed $33,554,656 $30,175,128 Number of Customers 21,680 21,113 Average monthly billing $128.98 $119.10

102


WATER FUND

STATISTICAL ANALYSIS

JUNE 30, 2003

Year Ended June 30, 2003 2002Production cost analysis:

Number of gallons billed 7,890,345,265 7,617,495,925

Expense of operations $7,792,048 $6,671,637

Cost per billed gallon $ .000988 $ .000876

Average Revenue Analysis:

Number of metered customers 14,663 13,596

Water usage billed $9,232,571 $8,902,637

Average monthly billing per metered customer $52.47 $54.57

TABLE I CITY OF ST. GEORGE, UTAH

GENERAL GOVERNMENTAL EXPENDITURES AND OTHER USES BY FUNCTION GENERAL FUND LAST TEN FISCAL YEARS

HIGHWAYS PARKS FISCAL GENERAL PUBLIC & PUBLIC RECREATION & YEAR GOVRNMNT SAFETY IMPRVMNTS PUBLIC PROPERTY OTHER TOTAL************ **************** ************************************ ************************** ******************************* 1994 1,954,842$ 3,800,744$ 4,541,221$ 2,589,492$ 1,335,400$ 14,221,699$ 1995 4,095,625 4,448,091 4,393,589 2,441,109 2,320,448 17,698,862 1996 2,518,228 4,740,659 4,129,613 3,188,672 1,877,640 16,454,812 1997 2,391,938 5,222,463 4,375,437 3,481,714 2,586,506 18,058,058 1998 2,685,261 6,082,104 4,889,735 3,835,310 2,963,682 20,456,092 1999 3,107,515 6,346,946 6,061,190 4,482,507 2,420,506 22,418,664 2000 3,335,747 7,344,769 5,971,003 4,501,654 2,808,512 23,961,685 2001 3,035,366 7,008,832 6,331,930 5,546,456 4,020,767 25,943,351 2002 3,211,163 7,197,215 6,767,621 5,864,233 3,709,530 26,749,762 2003 3,355,450 8,301,077 6,394,111 6,012,287 3,599,968 27,662,893

Source: St George City audited financial statements

TABLE II CITY OF ST. GEORGE, UTAH

REVENUES AND OTHER FINANCING SOURCES BY SOURCE GENERAL FUND LAST TEN FISCAL YEARS

INTEREST & IN LIEUFISCAL LICENSES INTER- CHARGES FOR FINES & OTHER & TRNFRS YEAR TAXES & PERMITS GOVERNMNTL SERVICES FORFEITS REVENUES IN TOTAL************ **************** ************************************ ************************** *************** *************** ************** *************** 1994 8,897,521$ 1,110,195$ 1,960,964$ 1,889,557$ 222,591$ 536,363$ - 14,617,191$ 1995 9,797,351 1,105,129 1,803,014 2,009,246 218,135 2,001,640 - 16,934,515 1996 11,566,055 999,997 1,018,774 2,430,778 216,661 414,811 - 16,647,076 1997 13,058,793 914,563 1,087,426 2,430,919 466,646 403,289 - 18,361,636 1998 13,877,051 974,139 2,071,624 2,827,836 397,018 504,605 - 20,652,273 1999 14,155,766 1,017,029 2,342,404 3,596,639 459,420 912,142 - 22,483,400 2000 15,087,379 1,074,999 2,363,853 3,679,499 646,262 1,653,766 - 24,505,758 2001 16,117,048 1,169,019 2,506,070 3,752,768 862,925 1,535,521 - 25,943,351 2002 17,874,099 1,448,310 2,052,480 3,999,759 739,632 636,002 - 26,750,282 2003 18,236,344 1,618,604 2,614,535 4,424,868 862,990 654,242 - 28,411,583


TABLE III CITY OF ST. GEORGE, UTAH TAX REVENUE BY SOURCE GENERAL FUND LAST TEN FISCAL YEARS

GENERAL GENERAL FISCAL PROPERTY SALES & FRANCHISE TOTAL YEAR TAXES USE TAXES TAXES TAXES************ **************** ******************* *********************************** 1994 2,616,833$ 4,833,226$ 1,447,462$ 8,897,521$ 1995 2,569,090 5,662,992 1,565,269 9,797,351 1996 3,356,531 6,335,072 1,874,452 11,566,055 1997 4,463,792 6,602,360 1,992,641 13,058,793 1998 4,769,964 6,917,219 2,189,868 13,877,051 1999 4,388,896 7,461,474 2,305,396 14,155,766 2000 4,521,037 8,133,428 2,432,914 15,087,379 2001 4,798,994 8,538,437 2,779,617 16,117,048 2002 5,056,459 9,571,255 3,246,385 17,874,099 2003 5,514,458 9,197,358 3,524,528 18,236,344

Source: St. George City audited financial statements

TABLE IV CITY OF ST. GEORGE, UTAH PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS

TOTAL AS FISCAL TOTAL CURRENT TAX % OF LEVY DELINQNT TOTAL TAX A % OF YEAR TAX LEVY (1) COLLECTION TO COLLECTN TAXES COLLECTION LEVY***************************** ******************* ******************* *************** ****************** ****************** 1994 2,584,171$ 2,433,255$ 94.16% 183,578$ 2,616,833$ 101.26% 1995 2,552,601 2,442,329 95.68% 126,761 2,569,090 100.65% 1996 3,377,891 3,224,368 95.46% 132,163 3,356,531 99.37% 1997 4,508,681 4,309,075 95.57% 154,717 4,463,792 99.00% 1998 4,858,046 4,568,751 94.05% 201,213 4,769,964 98.19% 1999 4,342,410 4,076,723 93.88% 312,173 4,388,896 101.07% 2000 4,517,406 4,224,226 93.51% 296,811 4,521,037 100.08% 2001 5,066,375 4,529,284 89.40% 269,710 4,798,994 94.72% 2002 5,096,122 4,716,756 92.56% 339,703 5,056,459 99.22% 2003 5,422,951 5,159,945 95.15% 354,513 5,514,458 101.69%

Source: St. George City audited financial statements (1) Washington County auditor

TABLE V CITY OF ST. GEORGE, UTAH

TAXABLE AND MARKET VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS

RATIO OFFISCAL TAXABLE TAXABLE TO YEAR VALUE MARKET VALUE MARKET VALUE************ ********************* ********************************************** 1994 1,063,313,701$ 1,354,585,067$ 78.50% 1995 1,311,055,379 1,625,967,438 80.63% 1996 1,459,063,750 2,029,085,374 71.91% *** 1997 1,675,477,790 2,310,563,406 72.51% *** 1998 1,884,382,850 2,699,357,487 69.81% *** 1999 2,035,823,012 3,042,482,776 66.91% *** 2000 2,348,189,583 3,384,819,688 69.37% *** 2001 2,454,639,268 3,538,473,790 69.37% *** 2002 2,557,010,645 3,686,046,771 69.37% *** 2003 2,806,163,266 4,045,211,561 69.37% ***

Source: Washington County auditor

*** taxable value determined by class of property 55% of fair market value of primary residential property 100% of fair market value of non-primary residential property

TABLE VI CITY OF ST. GEORGE, UTAH SPECIAL ASSESSMENT COLLECTIONS LAST TEN FISCAL YEARS

RATIO OF TOTALFISCAL CURRENT DUE CURRENT COLLECTIONS TO OUTSTANDING YEAR ASSESSMENTS COLLECTIONS AMOUNT DUE ASSESSMENTS************ ******************************************************************** ********************* 1994 1,051,400$ 1,033,415$ 98.30% 6,005,079$ 1995 1,647,505 1,322,694 80.30% 7,098,120 1996 1,085,000 1,085,929 100.10% 6,012,191 1997 1,062,000 984,972 92.70% 5,027,219 1998 1,052,000 778,882 74.03% 5,297,781 1999 1,012,000 1,031,544 101.93% 4,045,707 2000 1,051,213 743,247 70.70% 4,339,094 2001 845,511 487,025 57.60% 3,722,505 2002 918,151 416,161 45.33% 3,624,005 2003 1,111,883 892,819 80.30% 5,150,997


TABLE VII CITY OF ST. GEORGE, UTAH

PROPERTY TAX RATE - ALL DIRECT AND OVERLAPPING GOVERNMENTS PERCENT OF TAXABLE VALUE LAST TEN FISCAL YEARS

WASHINGTON WASH. WASH. WASH. WASH. FISCAL ST GEORGE COUNTY COUNTY COUNTY COUNTY CO WATER DIXIE YEAR CITY GEN PURPOSE LIBRARY REFUND SCHL DIST. CONSERVN CENTER TOTAL************ ***************** ******************** ***************** ********************** **************** ******************************* ************* 1994 0.002079 0.001445 0.000341 0.000020 0.008866 0.001000 0.000212 0.013963 1995 0.001923 0.001377 0.000317 - 0.008414 0.000993 0.000211 0.013235 1996 0.001984 0.001374 0.000322 - 0.007030 0.001000 0.000212 0.011922 1997 0.002258 0.001274 0.000299 - 0.006363 0.001000 0.000212 0.011406 1998 0.002188 0.001469 0.000309 - 0.006931 0.000988 0.000212 0.012097 1999 0.002133 0.001075 0.000306 - 0.007067 0.000966 0.000059 0.011606 2000 0.002091 0.000996 0.000295 - 0.006948 0.000900 - 0.011230 2001 0.002064 0.001357 0.000320 - 0.006905 0.000874 - 0.011520 2002 0.001993 0.001287 0.000310 - 0006743 0.000815 - 0.011148 2003 0.001939 0.001284 0.000419 - 0006732 0.000942 - 0.011316

Source: Washington County Treasurer

TABLE VIII CITY OF ST. GEORGE, UTAH

RATIO OF GENERAL BONDED DEBT TO TAXABLE VALUE AND BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS

RATIO OF GENERALGENERAL GENERAL BONDED

FISCAL TAXABLE BONDED BOND DEBT DEBT PER YEAR POPULATION VALUE DEBT TAXABLE VALUE. CAPITA************ ***************** ******************** ***************** ********************** **************** 1994 38,000 1,063,313,701$ 2,965,000$ 0.28% 78$ 1995 38,000 1,311,055,379 4,713,000 0.36% 124 1996 42,000 1,459,063,750 4,153,000 0.28% 99 1997 45,000 1,675,477,790 19,080,000 1.14% 424 1998 47,000 1,884,382,850 16,710,000 0.89% 356 1999 48,000 2,035,823,012 22,128,000 1.09% 461 2000 50,000 2,348,189,583 21,559,000 0.92% 431 2001 50,000 2,454,639,268 21,019,000 0.86% 420 2002 51,500 2,557,010,645 20,378,000 0.80% 396 2003 54,050 2,806,163,266 19,677,000 0.70% 364

Source: Washington County auditor

TABLE IX CITY OF ST. GEORGE, UTAH COMPUTATION OF LEGAL DEBT MARGIN YEAR ENDED JUNE 30, 2003

Taxable Value 2,806,163,266$

General obligation Water & Sewer Debt Debt

Debt limit 4% of taxable value 112,246,531$ Debt limit 8% of taxable value 224,493,061$

Amount of debt applicable to debt limit:

Total bonded debt 19,677,000$ 52,028,985$

Less assets restricted to bond retirement - (6,737,192)

Total amount of debt applicable to limit 19,677,000 45,291,793

Legal debt margin 92,569,531$ 179,201,268$

Total combined legal debt margin 271,770,799$

TABLE X CITY OF ST. GEORGE, UTAHCOMPUTATION OF DIRECT AND OVERLAPPING DEBT YEAR ENDED JUNE 30, 2003

PERCENTAGE CITY BONDED DEBT APPLICABLE TO SHARE

GOVERNMENTAL UNIT OUTSTANDING CITY OF ST GEORGE OF DEBT

City of St George, UT 19,677,000$ 100.00% 19,677,000$

Washington County 9,820,000$ 56.23% 5,521,786

Washington Co School District 117,382,603$ 56.23% 66,004,238

Washington Co. Water Conservancy 25,675,000$ 56.23% 14,437,053

Washington Co/St George City (WCIA) 22,665,526$ 38.00% 8,612,900

Total direct & overlapping debt 114,252,976$

Source: Washington County Auditor Washington County School District Washington Co. Water Conservancy District

TABLE XI CITY OF ST. GEORGE, UTAH

RATIO OF ANNUAL DEBT SERVICE EXPENDITURESGENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES

LAST TEN FISCAL YEARS

Total General Ratio of Debt

Fiscal Total Expenditures Service to Total Year Principal Interest Debt Service & Other Uses General Expend.************ ***************** ***************** ************************************** ********************* 1994 95,000$ 21,423$ 116,423$ 14,221,699$ 0.82% 1995 100,000 15,912 115,912 17,698,862 0.65% 1996 105,000 10,062 115,062 16,454,811 0.70% 1997 65,000 3,868 68,868 18,058,058 0.38% 1998 200,000 701,366 901,366 20,456,092 4.41% 1999 - - - 22,418,664 2000 60,000 954,751 1,014,751 24,976,436 4.06% ** 2001 60,000 963,535 1,023,535 26,968,080 3.80% ** 2002 60,000 959,635 1,019,635 27,770,711 3.67% ** 2003 95,000 954,423 1,049,423 28,713,656 3.65% **

Source: St George City audited financial statements ** General fund expenditures and recreation debt service fund

TABLE XII CITY OF ST. GEORGE, UTAH REVENUE BOND COVERAGE WATER & WASTEWATER UTILITIES WATER & WASTEWATER BONDS LAST TEN FISCAL YEARS

DIRECT NET REVENUE ---------------DEBT SERVICE REQUIREMENTS------------- Fiscal OPERATING AVAILABLE Year REVENUES EXPENSE DEBT SERVICE PRINCIPAL INTEREST TOTAL COVERAGE************ ***************** ***************** ************************************** ********************* ***************** *************** 1994 7,118,193$ 4,107,318$ 3,010,875$ 813,000$ 1,481,730$ 2,294,730$ 1.31 1995 7,856,095 4,594,906 3,261,189 1,421,211 1,497,124 2,918,335 1.12 1996 8,645,285 5,399,692 3,245,593 1,306,789 1,898,571 3,205,360 1.01 1997 10,472,351 6,124,125 4,348,226 1,730,000 2,118,325 3,848,325 1.13 1998 12,726,943 6,747,987 5,978,956 1,811,000 2,646,017 4,457,017 1.34 1999 13,803,583 6,999,645 6,803,938 1,771,000 2,766,370 4,537,370 1.50 2000 15,577,373 7,615,774 7,961,599 2,152,000 2,740,052 4,892,052 1.63 2001 17,070,967 7,940,496 9,130,471 3,341,478 2,725,606 6,067,084 1.50 2002 17,852,427 8,434,640 9,417,787 3,441,000 2,458,628 5,899,628 1.60 2003 19,867,223 9,627,467 10,239,756 4,134,000 2,421,420 6,555,420 1.56

INCLUDES ALL REVENUES AND EXPENSES FOR WATER UTILITY & WASTEWATER TREATMENT FUNDSSource: City of St George audited financial statements

109

TABLE XIII


DEMOGRAPHIC STATISTICS

CENSUS POPULATION COUNT:

1910 1,037 1920 2,215 1930 2,434 1940 3,591

1950 4,562 1960 5,130 1970 7,097 1980 11,350

1990 28,502 2000 49,663

AGE DISTRIBUTION OF POPULATION:

NUMBER PERCENTUnder 5 years 4,286 8.6%5 to 9 years 3,688 7.4%10 to 14 years 3,672 7.4%15 to 19 years 4,847 9.8%20 to 24 years 4,377 8.8%25 to 34 years 5,728 11.5%35 to 44 years 5,176 10.4%45 to 54 years 4,443 8.9%55 to 59 years 1,868 3.8%60 to 64 years 2,012 4.1%65 to 74 years 4,866 9.8%75 to 84 years 3,624 7.3%85 and over 1,076 2.2%

49,663 100.0%

Median age 31.4 years

Source: U.S. Census Bureau

TABLE XIV


PRINCIPAL TAXABLE PROPERTIES

JUNE 30, 2003

NAME TYPE OF BUSINESS TAXABLE VALUE % OF TOTAL

PRICE DEVELOPMENT REGIONAL SHOPPING MALL 30,459,520$ 1.09%WAL-MART INC SUPER WAL-MART RETAIL STORE 13,753,260 0.49%RIMROCK MARKETPLACE PROPERTY INVESTMENTS 13,364,340 0.48%IHC HOSPITALS MEDICAL PROVIDER 12,571,010 0.45%THE PLANTATIONS AT ST GEORGE PROPERTY INVESTMENTS 12,253,275 0.44%ZION FACTORY STORES HOLDING CO STRIP SHOPPING MALL 11,275,505 0.40%COSTCO WHOLESALE WHOLESALE SHOPPING CLUB 10,035,980 0.36%ZION FACTORY STORES III STRIP SHOPPING MALL 9,998,695 0.36%LESTER WITTWER INVESTMENTS PROPERTY INVESTMENTS 9,721,260 0.35%TARGET CORP SUPER TARGET RETAIL STORE 8,972,520 0.32%AH COOMBS LC PROPERTY INVESTMENTS 8,358,395 0.30%WITTWER INC PROPERTY INVESTMENTS 8,329,930 0.30%HARMONS GROCERY STORE COMPLEX 7,524,335 0.27%A & M INVESTMENTS PROPERTY INVESTMENTS 7,182,335 0.26%

163,800,360$ 5.84%

Source: Washington County Assessor

111

TABLE XV


MISCELLANEOUS STATISTICS

JUNE 30, 2003

Date of incorporation 1862

Form of Government Mayor-Council-Manager

Area 70.53 Square miles

Miles of streets 263

Fire Protection: Number of stations 6 Number of full-time firemen 8 Number of volunteer firemen 51

Police Protection: Number of stations 1 Number of policemen 67 Number of reserve officers 8

Education: Number of schools:

High School 3 Junior High 3 Elementary 6

Recreation and Culture: Number of parks 22 (total of 387.4 acres)

Number of libraries 1 Number of volumes 40,000 (approximately)

Employees: Classified service 342 Exempt 40 Part-time 311

Bldg. permits: #of units Const value 2003 2002 2003 2002 Single family residential 749 615 $107,190,002 $83,776,647 Condo/townhomes 446 320 48,360,895 31,142,000 Apartments/duplex 185 92 12,245,000 4,767,000 Mobile Home/RV 3 6 63,000 81,500 Commercial/Industrial 45,423,375 24,276,250 Miscellaneous/Additions 5,181,375 6,127,800 Government/Hospital addition - 58,240,000 Churches/Additions 2,581,000 1,900,000 Schools 687,700 30,000 Totals 1,383 1,033 $221,732,347 $210,341,197

112

THIS PAGE LEFT BLANK INTENTIONALLY

Documents

Sand Hollow Reservoir CITY OF ST. GEORGE, UT